Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — ROYAL NAVY

Malta Dockyard

Brigadier Mackeson: asked the Parliamentary Secretary to the Admiralty what cuts are anticipated in the Malta Dockyard; what steps he will take to keep discharges as low as possible; and if it is the intention of His Majesty's Government to allocate merchant ships to Malta for repair.

The Civil Lord of the Admiralty (Mr. Walter Edwards): The future industrial strength of Malta Dockyard has not yet been settled but the policy of the Admiralty is to keep discharges to the minimum by undertaking as much alternative work as possible. Control by licence of repairs to merchant ships is confined to the United Kingdom. But Malta Dockyard has authority to accede to requests to undertake repairs to merchant ships provided capacity is available.

Artificers (Pay and Promotion)

Mr. Willis: asked the Parliamentary Secretary to the Admiralty what are the total daily rates of pay of confirmed engine room artificers, 4th class, and of the same men immediately on promotion to Acting Sub-Lieutenant (E), respectively.

The Parliamentary and Financial Secretary to the Admiralty (Mr. John Dugdale): The total pay of a confirmed engine room artificer fourth class depends

on his service and qualifications. A representative rate would be about 73s. 6d. a week, which might be supplemented by watchkeeping certificate allowance of 7s. a week and marriage allowance of 40s. a week, if he were qualified for them. Immediately on promotion to Acting Sub-Lieutenant (E) an officer receives pay of 77s. a week. If married, and over the age of 25, he would also be eligible for marriage allowances of 87s. 3d. a week; if under the age of 25 the marriage allowance would be 45s. a week. The rates quoted in both instances do not take account of Service, accommodation and victuals.

Mr. Willis: Is my hon. Friend aware that I have just had a case drawn to my notice where a man loses £36 a year on promotion, and in view of the fact that that is likely to deter young artificers from accepting promotion, would he look into the matter with a view to removing the anomaly?

Mr. Dugdale: We are already considering it. A special rate of pay, assessed on the pay and continuous additions in the nature of pay made to them on the day before promotion, may soon be granted.

Rations (Economy Propaganda)

Sir Jocelyn Lucas: asked the Parliamentary Secretary to the Admiralty whether his attention has been called to the propaganda drawing handed out on H.M.S. "Triumph," showing a fat sailor and a starving civilian together with charts of the sailor's rations compared with those of the civilian's; and whether, in view of the implied suggestion that Service families and other civilians are being half starved to maintain excessive Service rations, he will discontinue this form of propaganda.

Mr. Dugdale: Yes, Sir. H.M.S. "Triumph" is serving on the Mediterranean Station and the issue of the drawing was the sequel to a talk given to the ship's company on the results of the economic crisis, and on the consequential necessity for strict economy in the use of rationed foodstuffs. No letterpress was issued with the drawing and it is evident from subsequent inquiries that the ship's company took the drawing in the way it was intended and not as reflecting any increase in the comparative stringency in the United Kingdom. I am unable to


accept the suggestion that the issue of this drawing constituted propaganda of the type described by the hon. Member.

Sir J. Lucas: Is my hon. Friend aware that I have had many letters from Portsmouth complaining about it, and, allowing for lack of opportunity for getting unrationed food, will he bear in mind the fact that members of the Service do not like to feel that they are getting an unfair advantage while their families suffer hardship?

Mr. Dugdale: They are not getting an unfair advantage. The fact remains that they are getting somewhat better rations, and it is necessary that they should, in consequence, save everything possible.

Earl Winterton: Can the hon. Gentleman say who gave the lecture?

Mr. Dugdale: It was given by a Service officer on board ship.

Lieut.-Commander Gurney Braithwaite: Can the Minister explain why the extremely corpulent naval rating shown in this drawing, who had obviously been engaged in consuming his shipmates' rations, should be wearing three good conduct badges?

Vice-Admiral Taylor: Would the hon. Gentleman take steps to stop this kind of lecture as being quite irrelevant?

Mr. Dugdale: It is perfectly correct that a lecture has been given, and I have taken no exception to it, and I have no intention of stopping it.

Scientists, Armament Supply Department (Salaries)

Colonel Wheatley: asked the Parliamentary Secretary to the Admiralty if, in view of the many assurances given since October, 1946, regarding the new salaries scales for Scientists in the Armament Supply Department, he will now state how the matter stands.

Mr. W. Edwards: A further meeting was held with the Staff Association concerned on 22nd October, as a result of which they have submitted more detailed representations in writing in support of their particular claim on behalf of these production chemists. These written representations are receiving urgent consideration, and special steps will be taken to see that

definite proposals are now put to the Association with the minimum of delay.

War Service Claims

Mr. Irvine: asked the Parliamentary Secretary to the Admiralty on how many occasions in the last 12 months or latest convenient period claims for damages at common law arising during the claimants' war service in the Royal Navy have been resisted by the Admiralty on the ground that such claims were out of time and Statute-barred.

Mr. Dugdale: Admiralty records are not kept in a form which would enable this Question to be answered without a very great amount of work. Claims for damages at common law by present and former members of the Royal Navy in respect of incidents arising during their war service are, however, very infrequent. If the hon. Member has a specific case in mind and will let me have the necessary details, I shall be glad to investigate the matter.

Mr. Irvine: May I ask my hon. Friend whether, in these cases, the principle is adopted of recognising that it is extremely undesirable to invoke the Statute of Limitations in the case of claims made by ex-Service men who served in the last war?

Mr. Dugdale: I think the main difficulty is the question whether the claim is more than a year old. I agree that there may be cases when a claim more than a year old might be considered, but, in general, there is this rule that a claim must not be more than a year old.

Mr. Skeffington-Lodge: Is my hon. Friend aware that the Admiralty is continually chasing "hostilities only" ratings, who appear to have no redress? Surely, what is sauce for the goose is sauce for the gander?

Employees, Rosyth (Accommodation)

Mr. McLean Watson: asked the Parliamentary Secretary to the Admiralty if there are any works projects in hand in the Rosyth area for providing accommodation for Admiralty employees displaced from hostels in the neighbourhood.

Mr. W. Edwards: Yes, Sir. Three huts in Castle Road, Rosyth, were adapted earlier in the year to provide


sleeping accommodation for 37 men who are messed at the adjacent British Sailors' Society Hostel. In addition, work has commenced upon the conversion of a hutted camp in Admiralty Road, Rosyth, which will provide accommodation for about 86 men.

Mr. Watson: Can my hon. Friend tell me when the extra accommodation is likely to be ready?

Mr. Edwards: The last accommodation to which I referred is expected to be completed by March, 1948.

Mr. Gallacher: Is the Minister aware that this question of accommodation for workers at Rosyth is very serious, that, in one hostel, Rosyth workers have been refused food in an effort to starve them out, and will he send a naval patrol to deal with that situation?

Mr. Edwards: I am afraid that naval patrols do not have to undertake that particular job. We are aware of the position, and we are doing all we possibly can within the limited time at our disposal to see that, at least, the Admiralty men displaced will have some accommodation.

Captain Marsden: Does all this indicate that Rosyth Dockyard will be kept on a permanent basis with a proper staff?

Mr. Edwards: I am afraid there is no reason for that assumption at all.

Dockyard Workers (Deputations)

Mr. Boyd-Carpenter: asked the Parliamentary Secretary to the Admiralty why the request to the Civil Lord of the Admiralty to receive a deputation from the Dockyard Chargemen's Association has been refused.

Commander Noble: asked the Parliamentary Secretary to the Admiralty why consent was refused to the request to receive a deputation from the Amalgamated Association of, Royal Dockyard Ex-Apprentices and Apprentices.

Mr. W. Edwards: The only bodies with which the Admiralty negotiate on behalf of Admiralty industrial employees are the Shipbuilding Trade Joint Council and the Admiralty Industrial Council. Neither the Amalgamated Association of Royal

Dockyard Ex-Apprentices and Apprentices nor the Chargemen's Association is recognised by the trade union side of these councils, and their requests to send deputations were, therefore, refused.

Mr. Boyd-Carpenter: Is the Civil Lord aware that recent Admiralty decisions have menaced the very existence of the trade union specifically mentioned in my Question, and, in these circumstances, is it not somewhat arbitrary and oppressive to refuse to receive these people and discuss the matter with them?

Mr. Edwards: I do not see that it is arbitrary and oppressive. I think the proper way to carry on negotiations with regard to the wages and conditions of workpeople is to recognise the existing trade union machinery. We have these councils set up for this purpose, and it may interest the hon. Gentleman to know that the Dockyard Chargemen's Association has not been recognised by the trade union side of the Joint Industrial Council. It is only recently that they were permitted to go along to that Council.

Mr. Boyd-Carpenter: Is the hon. Gentleman aware that the matter which the deputation desired to raise was not a question of wages and hours, but a far broader question, and, if his refusal to see them was founded on a previously false belief, will he now agree to see a deputation from this substantial body representative of a good many of the men employed?

Mr. Edwards: If the representatives of this body want to make representations outside the functions of the Admiralty Joint Industrial Council and they will write to me, I will consider them, but I am not prepared to receive a deputation upon industrial matters affecting wages and conditions from any organisation outside the Joint Industrial Council.

Commander Noble: Would the Civil Lord say if the real reason is that this union is not affiliated to the T.U.C.?

Mr. Edwards: I can assure the hon. and gallant Gentleman that that is not the real reason. Actually, this Association was only set up as a result of the Trade Disputes Act, 1927, and, as that Act has since been repealed, we are now reverting to the former position.

Sir J. Lucas: Is it not usual for dockyard Members of Parliament to be allowed to bring a deputation? Why was I refused this privilege?

Mr. Edwards: I do not think it is at all usual. I am always ready to see as many people as I possibly can, but if the deputation is to serve no useful purpose I cannot see any reason for receiving it.

Mr. Medland: Will my hon. Friend say whether it is not the practice that all matters affecting both chargemen and apprentices are covered on the Admiralty Joint Industrial Council at the present time, and would it not be adding extra work to what is already covered by having Members of Parliament dealing with industrial matters?

Hon. Members: Oh.

Sir J. Lucas: In view of the fact that the Minister first told me that he could not receive a deputation without a Member of Parliament, and that, when I said I was coming with a deputation, he further refused, I beg to give notice that I will raise this matter on the Motion for the Adjournment.

Naval Attachés (Conferences)

Mr. Keeling: asked the Parliamentary Secretary to the Admiralty whether he will arrange for conferences in London of naval attachés to British embassies, similar to the conferences of military attachés which are held from time to time.

Mr. Dugdale: The question whether such conferences would, on balance, prove to be of advantage in the case of naval attachés is under examination.

Mr. Keeling: May I ask the hon. Gentleman whether he is aware that not only military attachés but air attachés meet in London at least once a year, and should not the Royal Navy be in the van in this matter?

Mr. Dugdale: I am aware of that, and we consider that there may be an advantage in that suggestion, and we will look into the matter further.

Captain Marsden: May I ask the hon. Gentleman whether he thinks that we might obtain from the foreign naval attachés such information as we cannot get in the House of Commons?

Oral Answers to Questions — POST OFFICE

Telephone Service (Government Departments)

Brigadier Rayner: asked the Postmaster-General what proportion of the total annual receipts from telephone services since the end of the war comes from Government Departments.

The Postmaster-General (Mr. Wilfred Paling): For the last two completed financial years the estimated proportions were: 1945–6, 30.6 per cent.; 1946–7, 22.5 per cent.

Brigadier Rayner: In view of the great increase in proportion, as compared with before the war, may we take this as some measure of the strangling increase of controls?

Mr. Paling: No, Sir. The fact is that this was bound to go up during the war, and, since the war ended, it is going down.

Mr. Bing: Is My right hon. Friend aware that the cost of postal services to the Services is not included in the estimated cost given in the White Paper on Defence, and will he make representations to the Minister of Defence to see that this is prepared for the next occasion?

Special Postmark (Design)

Mr. Emrys Hughes: asked the Postmaster-General who designed the black stamp with the initials "E.P." that is appearing on letters; how much is the estimated cost; and how long is it to be used.

Mr. Wilfred Paling: The commemorative postmark was designed by a draughtsman in the engineering department of the Post Office as part of his normal work. The estimated cost of the dies is £2,027. The postmark was in use from 20th of November until the end of that month.

Sir Ralph Glyn: May I ask the Postmaster-General if he appreciates that this action by his Department has caused a great deal of satisfaction?

Mr. Emrys Hughes: Does not the right hon. Gentleman realise that a large section of public opinion thinks that this is merely silly and should be withdrawn?

Mr. E. P. Smith: Will the right hon. Gentleman bear in mind that the letters "E.P." in proper combination are the most important letters of the alphabet?

Mr. Skeffington-Lodge: Will not my right hon. Friend consider using this lover's knot design on our letters until the approaching festive season is over?

Mr. Stokes: Or until the Foreign Ministers' Conference is over?

Royal Wedding (Commemorative Stamp)

Mr. Keeling: asked the Postmaster-General whether he is aware that four days before the Royal Wedding the Australian Government issued a commemorative postage stamp, of which first the design and then a proof had been despatched from Australia and approved by His Majesty; whether he realises that if he had initiated with equal energy a commemorative stamp in this country much pleasure would have been given to the public and many, dollars obtained; and whether he will arrange for special stamps to be prepared promptly on future occasions of national rejoicing.

Mr. Wilfred Paling: I understand this is a new permanent penny stamp of the Commonwealth which had been put in course of production some months previous to the announcement of Her Royal Highness' wedding. As stated in reply to the hon. Member for Preston (Dr. Segal) and the hon. Member for Woodbridge (Mr. Hare) on 26th November, I much regret that the time available between the announcement and the date of the wedding did not suffice for the design, printing and issue of a special stamp worthy of the occasion. I can assure the hon. Member that the question of issuing special postage stamps on suitable occasions always receives due consideration.

Mr. Keeling: Is the right hon. Gentleman aware that the smaller the initial issue, the higher would have been the price obtainable in dollars and cents; and is he further aware that the inaction of the Post Office in this matter is, in the view of many people, typical of the timid and tepid response of the Government to the public desire to honour this great national event?

Mr. Paling: What I am aware of is that the hon. Gentleman has tried to prove by citing the case of the Commonwealth that we have been timid, and that his case falls to the ground completely on the answer I have given.

Oral Answers to Questions — ROYAL AIR FORCE

Civilian Motor Drivers

Mr. Touche: asked the Secretary of State for Air why civilian motor drivers employed by the R.A.F. cannot be replaced by training conscripts, and thus save manpower and expense.

The Under-Secretary of State for Air (Mr. Geoffrey de Freitas): The R.A.F. already train suitable National Service men as drivers, and to increase the amount of such training would not save manpower or expense.

Mr. Touche: Is it not true that large numbers of R.A.F. conscripts are not allowed to become drivers?

Mr. de Freitas: Our training facilities are naturally limited, as my right hon. Friend the Minister of Labour indicated last week. We have to put first on the training course those who are Regulars because we get greater productive returns out of them.

Squadron-Leader Fleming: Could the Minister say how many civilian drivers are still employed by the Royal Air Force?

Mr. de Freitas: Yes, Sir, I can. It is not a question of still employed, because we intend to employ them permanently. There are 3,000 such drivers who are employed mostly in such directorates as the Directorate of Work which, in the Royal Air Force, is a civilian directorate entirely run by civilians.

Mr. Touche: Why not use Service drivers in their place?

Mr. de Freitas: Because there is no economy in throwing out trained civilians and using up skilled manpower in training men straight from civilian life.

Mr. Bing: Is my hon. Friend aware that these civilian drivers are not included in the total of military personnel given in the Defence White Paper, and will he make representations to his right hon. Friend the Minister of Defence to see that


these totals are amended to include the large numbers of persons who, up to now, are not included under military employment?

Mr. de Freitas: That has not been brought to my attention before. Of course, they are included in the Estimates, but I will certainly look into the matter.

Auxiliary Squadrons

Mr. Crawley: asked the Secretary of State for Air whether it is proposed to make changes in the role of any of the Auxiliary Air Force Squadrons.

Mr. de Freitas: Yes, Sir. The four bomber squadrons are to be converted to fighters. All 20 Auxiliary Air Force squadrons will now form part of the air defences of this country.

Mr. Crawley: Is the Minister aware that this is a return to the traditional role of the Auxiliary Air Force—the role which they fulfilled at the beginning of the war—and will he give wide publicity to the matter with a view to encouraging recruitment?

Mr. de Freitas: I hope it will receive publicity.

Air-Commodore Harvey: Will the hon. Gentleman try to make the facilities more attractive, in which case he will get more recruits?

Mr. de Freitas: Yes, Sir.

Oral Answers to Questions — CIVIL AVIATION

B.E.A.C. Dismissals

Mr. Geoffrey Cooper: asked the Parliamentary Secretary to the Ministry of Civil Aviation, if he is satisfied that the intended dismissals of some 2,500 employees on the staff of the British European Airways Corporation is being conducted with meticulous fairness; can he state the method being employed for determining who shall be dismissed and who not; and is the reduction in staff being extended also to the top level executives, a similar if not greater proportion of whom will also become redundant with the reduction in size of the Corporation's activities.

The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): This is a matter of management for the

Corporation. I am satisfied that such dismissals as become necessary are being determined under the normal negotiating machinery of the National Joint Council.

Mr. Cooper: Is my hon. Friend aware that the system which the Corporation has announced is that of merit and that there seems to be no system of assessing merit? In a case of an overseas headquarters, namely, in Switzerland, where traffic has fallen, the staff still remains at a high level, and does not he think that his Department should take an interest in this matter?

Mr. Lindgren: Yes, Sir, the Department does take an interest, but, primarily, the responsibility is between the employer and the employee and the negotiating machinery is used for that purpose. The general conditions applied are those of length of service, ability and the general satisfactory service of the person concerned.

Foreign Aircraft (Armed Guards)

Sir Ralph Glyn: asked the Parliamentary Secretary to the Ministry of Civil Aviation whether at Northolt airfield, or any other British airfield, there is provided adequate protection for foreign aircraft there accommodated; and whether there has been any instance where the foreign country owning such aircraft has provided armed guards for their protection without reference to the British authorities in charge of such airfields.

Mr. Lindgren: All aircraft, British or foreign, are under the protection of the airport police at all civil airports in the United Kingdom. It would not be exceptional for foreign aircraft carrying diplomatic passengers also to be guarded by members of their own crew, whether armed or not.

Sir R. Glyn: Is it not a new situation in this country for a foreign Power to bring an armed guard here?

Mr. Lindgren: No, Sir, it is not new. The last occasion on which it happened was in connection with an aircraft belonging to the President of the United States which brought the American Secretary of State to the Foreign Ministers Conference. In that particular case two members of the crew, armed with automatic pistols, formed a guard. That was in October, 1947.

Sir R. Glyn: Would the hon. Gentleman point out to our friends in the United States that it is quite unnecessary to bring people to guard their aircraft on British airfields?

Mr. Stokes: Would my hon. Friend explain to the House how two men managed continually to guard an aeroplane?

Mr. Lindgren: These are generally military aircraft. It is not unusual in military aircraft for members of the crew, at various times, to form a guard over their aircraft.

Mr. Scollan: Could not my hon. Friend point out to the representatives of that country that they are coming to a civilised country where that sort of thing is unnecessary?

Colonel J. R. H. Hutchison: asked the Parliamentary Secretary to the Ministry of Civil Aviation in what circumstances a guard of armed Russian soldiers was mounted over Russian aircraft at Northolt Aerodrome.

Mr. Lindgren: So far as I am aware, no such armed guard has been mounted on these aircraft.

Colonel Hutchison: In view of the previous answer of the Parliamentary Secretary given to a similar Question, in which he said it was the practice, or had been the practice, for the armed crew of an aircraft to be put on guard over foreign aircraft, why is it that these members of the guard were put on board specially?

Mr. Lindgren: In reply to the previous Question I said it was not unusual for an aircraft to be put under an armed guard.

Mr. Cecil Poole: Could the Minister say why some hon. Members of this House are so touchy about Russia guarding her own property in this country?

Colonel Hutchison: Is it disputed that there was an armed guard over this aircraft?

Mr. Lindgren: There was no armed guard, and no snow on their boots either.

Safety Regulations (Foreign Aircraft)

Sir R. Glyn: asked the Parliamentary Secretary to the Ministry of Civil Aviation what instances there have been on any British airfield of foreign aircraft

landing or taking off, after discharging passengers or goods, without the permission of the authority in charge of operations; and for the protection of all air traffic what action is taken against any offending aircraft ignoring the usual safety regulations.

Mr. Lindgren: No such instances have been recorded at airfields in this country where there is a civil control organisation. Under Article 10 of the Air Navigation (Consolidation) Order, the Ministry of Civil Aviation has the power to detain any aircraft which is intended or likely to be flown in contravention of existing regulations.

Ex-R.A.F. Airfields (Use)

Sir R. Glyn: asked the Parliamentary Secretary to the Ministry of Civil Aviation of he will give the locations of ex-R.A.F. airfields in the counties of Berkshire, Oxfordshire and Wiltshire which have been, or will shortly be, allocated for the use of civil aviation and flying clubs.

Mr. Lindgren: Aldermaston, Kidlington and White Waltham are ex-R.A.F. airfields in use for civil aviation purposes. Flying clubs are located at Kidlington and White Waltham.

Consultative Council (Membership)

Mr. Cooper: asked the Parliamentary Secretary to the Ministry of Civil Aviation what are the names of those now appointed to the National Civil Aviation Consultative Council; in particular what is his policy in connection with the inclusion of Members of Parliament on this Council; and what are the principles guiding him in his selection of the members of the Council.

Mr. Lindgren: The National Civil Aviation Consultative Council is an advisory body appointed by my noble Friend as being representative of a wide variety of interests associated with civil aviation. Members of Parliament are not included on the Council in that capacity. I am circulating in the OFFICIAL REPORT the Council's membership and terms of reference.

Mr. Cooper: Would my hon. Friend make representations to his noble Friend on the score of Members of Parliament being included on this Council along the


lines of Members being included on the Post Office Advisory Council, because I think this is a similar case?

Mr. Lindgren: The Post Office Council is, I think, a consumers' council. This is an advisory council to my noble Friend, and Members of Parliament are not included as such, although they can be included.

Mr. Beswick: Does not the Minister think that the consumers' interests are among the interests he should consult?

Mr. Lindgren: The Air Transport Advisory Council consider consumers' interests.

Following are the membership and terms of reference:

NATIONAL CIVIL AVIATION CONSULTATIVE COUNCIL

Terms of Reference

To be a forum for the review of developments in Civil Aviation in the examination of questions relating thereto.

2. Membership of the Council

The Rt. Hon. Lord Nathan, T.D., Minister of Civil Aviation, Chairman.
G. S. Lindgren, Esq., M.P., Parliamentary Secretary to the Ministry of Civil Aviation, Vice Chairman.

Operators (Group I).

J.Booth,Esq.,J.P.—British South American Airways Corporation.
W. N. Cumming, Esq.—British Air Charter Association.
Mrs. A. Douglas.—British Gliding Association.
G.d'Erlanger,Esq.,C.B.E.—British European Airways Corporation.
Sir Harold Hartley, K.C.V.O., G.B.E., M.C., F.R.S.—British Overseas Airways Corporation.
Doctor G. Humby.—Association of British Aero Clubs.
Major R. H. Mayo, O.B.E.—Royal Aero Club.

Personnel (Group II).

Lord Dukeston, C.B.E.—Trades Union Congress.
G. Hitchings, Esq.—Other Unions represented on the National Joint Committee for Civil Air Transport.
Captain J. W. G. James.—British Airline Pilots' Association.
D. H. Lamb, Esq.—Radio Officers' Union.

Constructors (Group III).

Sir F. Handley Page, C.B.E.—Society of British Aircraft Constructors and also Air Registration Board (Group V).
W. R. Verdon Smith, Esq.—Society of British Aircraft Constructors.
C. O. Stanley, Esq.—Radio Industry Council.

Users (Group IV).

Leslie Gamage, Esq., M.C.—Joint Air Transport Committee of the Association of British Chambers of Commerce, the Federation of British Industries and the London Chamber of Commerce.
Colonel H. H. Gardiner.—Creative Tourist Agents Conference and Institute of Travel Agents.
Councillor F. Russell.—Association of Municipal Corporations.

General (Group V).

Air Commodore A. R. Churchman, D.F.C—Northern Ireland Advisory Council.
A. C. Jack, Esq.—Society of Licensed Aircraft Engineers.
Captain A. G. Lamplugh, C.B.E., British Insurance Association; alternating annually with Group Captain D. de B. Clarke, C.B.E.—Lloyds.
Lord Provost Sir Hector MacNeil.—Scottish Advisory Council.
C. M. Newton, Esq.—Aerodrome Owners' Association.
J. S. Nicholl, Esq., C.B.E., M.A., M.Inst.T.—Institute of Transport.
Wing Commander N. H. Woodhead, D.F.C., A.F.C.—Guild of Air Pilots and Air Navigators of the British Empire.

Minister's Journey (Chartered Aircraft)

Sir Wavell Wakefield: asked the Parliamentary Secretary to the Ministry of Civil Aviation why opportunity was not given to passengers waiting to fly to Australia and the Far East to be carried in the vacant seats of the specially chartered aircraft which carried the Minister of Civil Aviation on his recent visit to Australia and the Far East, in order to reduce the cost of this trip and in view of the long list of persons awaiting air passage to that part of the world.

Mr. Lindgren: No seats were available.

Sir W. Wakefield: Is it not a fact that in reply to previous Questions asked on this matter, an indication was given that the aircraft was not full and that seats were available, and, that being the case, how comes it that we receive this reply today?

Mr. Lindgren: The determining load factor in an aircraft flying from this country to Australia is the sector from Karachi to Singapore. As far as that sector was concerned, the aircraft was fully loaded.

Sir W. Wakefield: Can the Minister say how many passengers there were?

Mr. Lindgren: I would like notice of that Question. I think there were six or seven, but I am not quite certain.

Sir W. Wakefield: asked the Parliamentary Secretary to the Ministry of Civil Aviation what tenders were received from Charter Companies by B.O.A.C., and for what amount, to carry the Minister of Civil Aviation on his recent visit to Australia and the Far East.

Mr. Lindgren: None, Sir.

Sir W. Wakefield: Does the Parliamentary Secretary mean that no quotations were given to the B.O.A.C., which is a chartered company, for this trip, and, if not, why not?

Mr. Lindgren: In air transport, as in all other businesses, there are generally accepted prices and practices. [HON. MEMBERS: "No."]The prices determining the cost of aircraft are its operating costs, landing charges and demurrage. These charges are well known.

Sir W. Wakefield: Is it not a fact that tenders were given many thousands of pounds lower than the actual cost of this trip, and will the Parliamentary Secretary go into that and check his facts?

Mr. Lindgren: No, Sir, I am not aware of that.

Mr. Francis Noel-Baker: Can the Parliamentary Secretary say how many journeys for a similar purpose, and at what cost, were organised for Ministers in the preceding Government?

Mr. Lindgren: I have not that information at the moment.

Mr. Keeling: Will the Parliamentary Secretary say whether it is an accepted practice in air transport to leave a seat empty between London and Karachi because it will be filled from Karachi to Singapore?

Mr. Lindgren: No, if the passengers are through passengers the aircraft has to fly light between London and Karachi. Sometimes it is possible to take a passenger from London to Karachi if one is picking up a passenger at Karachi.

Corporation Employees (Representations)

Mr. Cooper: asked the Parliamentary Secretary to the Ministry of Civil Aviation what steps he is taking to implement Section 41 of the Civil Aviation Act; and when instances of failure to comply with the provisions of this section on the part of any of the Corporations are

brought to his notice by any workers' organisations interested, whether he ensures that action is taken to effect remedies.

Mr. Lindgren: The initiative under Section 41 of the Act does not lie with my noble Friend, but if a dispute referred to him under that Section could not otherwise be disposed of, it would be for him to refer it to the Industrial Court for settlement.

Mr. Cooper: May I ask my hon. Friend whether, if details are given to him of a trades union which has made representations under this Section, and received no satisfaction, he will look into that case?

Mr. Lindgren: With pleasure.

Overseas Travel Restrictions (Effect)

Mr. A. Edward Davies: asked the Parliamentary Secretary to the Ministry of Civil Aviation (I) what effects on air traffic the recent restrictions on overseas travel are having; and what adjustment in the services has been made, or contemplated;
(2) what effect the recent cuts in capital expenditure and the restrictions on overseas travel have had on the development programme of his Department and the three air corporations.

Mr. Lindgren: So far as the British Overseas Airways Corporation and British South American Airways Corporation are concerned, the recent restrictions on overseas travel have had only a negligible effect. No adjustment of services has been caused thereby nor is any contemplated. As regards B.E.A.'s continental services, the number of passengers carried in October was about 25 per cent. below that carried in September. It is, however, impossible to say how much of this reduction was seasonal and how much attributable to the restrictions on overseas travel. The frequencies of certain continental services have been adjusted to the traffic. As to the effect upon the development programme of my Department, I would refer my hon. Friend to Appendix A5 of the recently published Government White Paper on Capital Investment (Cmd. Paper 7268).

Mr. Douglas Marshall: May I ask the Minister whether, in view of the adjustment to which he has just referred, he will consider the possibility of introducing an air service to the West of England and Cornwall?

Mr. Lindgren: That does not arise out of this Question.

Airports, Edinburgh

Mr. Willis: asked the Parliamentary Secretary to the Ministry of Civil Aviation what airfields near Edinburgh are being considered as alternative airports to Turnhouse.

Mr. Lindgren: None, Sir.

Mr. Willis: May we take it that the Minister is satisfied that Turnhouse aerodrome will meet the requirements of Edinburgh in any season?

Mr. Lindgren: There may have to be diversions to other airports, owing to exceptional weather conditions.

Mr. Willis: Can my hon. Friend say where those diversionary airports will be?

Mr. Lindgren: Probably Leuchars; possibly Renfrew or Prestwick.

Mr. Willis: asked the Parliamentary Secretary to the Ministry of Civil Aviation what landing difficulties are anticipated at Turnhouse aerodrome during the winter; and whether these are likely to result in a cessation of the London—Edinburgh air service.

Mr. Lindgren: Bad weather may occasionally interrupt the service, but otherwise it will continue.

Lieut.-Colonel Elliot: Is the Minister aware that those using this airport are afraid that under other conditions, not especially bad weather conditions, this service will be interrupted, and will he take steps to improve the airport?

Mr. Lindgren: The airport is not as entirely satisfactory as we would desire, and any improvement in navigational aids that can be made is being done.

Mr. Willis: Is the Minister prepared to consider East Fortune, Drem and Macmerry as alternatives rather than Leuchars, Renfrew and Prestwick?

Mr. Lindgren: Regarding East Fortune, an undertaking was given that, owing to

the presence of a sanatorium in the vicinity, it would not be used for civil aviation purposes in peacetime.

Oral Answers to Questions — GERMANY

Reparation Plants

Mr. Stokes: asked the Secretary of State for Foreign Affairs how many machine tools and processes have been removed from German factories by T-force; how many factories have thereby been affected outside the range of those recently listed for dismantling; how many more tools and processes remain to be removed by T-force; and how many further factories will be so affected.

The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): Seven hundred and forty-one machine tools and processes have been removed by T-force; of these 363 were from 183 factories not among those recently listed for dismantling. Another eight have been requisitioned and await removal, but no additional factories are involved, and no further requisitioning will take place.

Mr. Stokes: asked the Secretary of State for Foreign Affairs whether he will give a clear definition of buildings which, though at one time used for war purposes, are now not to be destroyed if they can be used for peaceful purposes, as stated in a recent declaration accompanying the list of factories to be dismantled for reparations in Germany; and whether this list of buildings to be spared includes the Rhine Metal Works at Dusseldorf, the office buildings of the Torpedo Factories at Eckenforde and some of the buildings at Krupps Works at Essen.

Mr. Mayhew: The recent declaration to which my hon. Friend refers covered only buildings in plants on the list which was published for reparations. Instructions have been issued that surface buildings in these plants may be retained, pending further agreement between the Allied Governments, even though they were specially built for armaments production or other war purposes. I will send my hon. Friend a copy of the actual instruction. There are also other buildings scheduled for destruction which are not part of these reparations plants but which form part of military installations of various kinds. Regional Commissioners


have been given authority for some time past to suspend the destruction of such buildings if they are needed for the German economy. It has, however, been thought desirable to clarify the position still further in order to make it quite clear that air-raid shelters, and similar constructions, are not to be destroyed at present if they are needed for accommodation or storage purposes. I shall be glad to let my hon. Friend have a copy of these instructions as soon as they are issued.

Mr. Stokes: While I thank my hon. Friend for his reply, may I ask if he can assure me that those buildings in Eckenforde are not to be destroyed?

Mr. Mayhew: We are considering that particular case and I will write to my hon. Friend on the matter.

Mr. Scollan: Is the Minister not yet convinced that the hon. Member for Ipswich (Mr. Stokes) is a legatee of the late German regime?

Mr. House: Would the right hon. Gentleman agree that it is futile to conclude that any sound factory cannot be used for peaceful purposes, particularly in a devastated country like Germany?

Mr. Mayhew: We are taking a liberal view on the question.

Mr. Stokes: asked the Secretary of State for Foreign Affairs what is the estimated value of patents, processes, designs, secrets and know how, etc., taken from Germany under T Force operations; and how far they correspond with the assessed value of £2,000,000,000 as claimed by Mr. Molotov.

Mr. Mayhew: It would be impossible to make a reliable estimate of this character, since the products of the investigations referred to have not been sold, but with few exceptions have been published and made freely available to the world. The figure mentioned by Mr. Molotov covered a wider field than that referred to in the Question and was, even so, a fantastic over-estimate.

Mr. Stokes: That may very well be true, but may I ask how my hon. Friend proposes to assess the value of these various appropriations in arriving at the total amount paid in reparations?

Mr. Mayhew: I do not think an estimate can be made. In any case, I can see no purpose in offsetting it against some other hypothetical figure.

Domestic Fuel

Mr. Vane: asked the Secretary of State for Foreign Affairs whether he is satisfied that the waste of good timber in the British zone of Germany as domestic fuel has substantially ceased.

Mr. Mayhew: Every effort is being made to reduce the waste of timber in the British zone of Germany and there has been a substantial cut in the allocation for domestic fuel. The matter is, however, primarily one for the German authorities.

Mr. Vane: asked the Secretary of State for Foreign Affairs what is the present domestic ration of coal and of fuel wood in the British zone of Germany.

Mr. Mayhew: The solid fuel ration for the average household for the year beginning 1st May, 1947, is the equivalent of cwts. of hard coal. The ration is made up of varying proportions of hard coal, brown coal briquettes, wood and peat according to local availabilities.

ERITREA (COMMISSION)

Mr. Longden: asked the Secretary of State for Foreign Affairs what the objective is of the visit to Eritrea by the Commission appointed by the Foreign Ministers; is he satisfied that the forty-eight hours allotted for the task is sufficient; and if the findings of the Commission will be submitted to this House before any final decision is made.

Mr. Mayhew: The Commission is obeying the procedure laid down in the Italian Peace Treaty, which provides that a Commission should visit the ex-Italian Colonies in order to supply the Deputies of the Foreign Ministers with information to assist their consideration of the disposal of these territories, and in order to discover the views of the local population. A period of 40 days has been allotted to the Commission for their visit to Eritrea and I am advised that this will be sufficient. The answer to the last part of my hon. Friend's Question is, "No, Sir."

Mr. Longden: Can the Minister say if and when Eritrea will be allowed to return


to the Mother country, Ethiopia, or whether we must wait until there is a repetition of what is now happening in Somaliland?

Mr. Mayhew: That is a different question.

Mr. John Hynd: On what grounds is Eritrea included in the category of ex-Italian colonies?

Mr. Mayhew: I should like notice of that question.

PRAYER FOR THE ROYAL FAMILY

Mr. Keeling: asked the Lord President of the Council why the words "the Duke of Edinburgh" instead of "Philip, Duke of Edinburgh" have been inserted in the Prayer for the Royal family; and whether a correction will be made.

The Lord President of the Council (Mr. Herbert Morrison): The words to which the hon. Member refers were inserted in the Prayers for the Royal Family because they were not only adequate, but also consistent with recent precedents. As regards the last part of the Question, the answer is in the negative.

Mr. Keeling: May we take it that all the precedents, modern and not so modern, were consulted before the words "Duke of Edinburgh" were decided upon?

Mr. Morrison: I cannot say about all the precedents, but they are fairly clear. In the reign of George II the Duke of Cumberland was referred to as "the Duke" and nothing else. Then there was reference to the Princess Dowager of Wales, the widow of the eldest son of George II. Other examples are: the Princesses, presumably the daughters of George II; the Prince of Wales who became Edward VII—that is fairly modern; the Prince Consort; the Princess of Wales on various occasions; and the Duchess of Cornwall and York, who is now Her Majesty Queen Mary. I think that is fairly conclusive that the precedents justify this action.

Mr. Gallacher: Are we to take it from this Question that the recording angel may have some doubts about the subject?

Mr. Morrison: I think the recording angel often has some doubts about the hon. Member for West Fife (Mr. Gallacher).

Mr. Scollan: Are we to take it that the Duke of Edinburgh received his title without any consultation with the Scottish people?

Mr. Speaker: That has nothing to do with the Question on the Order Paper.

Oral Answers to Questions — ARMED FORCES

Ration Scales

Sir J. Lucas: asked the Minister of Defence if he will state the meat, bacon, bread and sugar rations, respectively, for the Services as compared with those for civilians; and whether the same Service rations are given to both male and female personnel.

The Minister of Defence (Mr. A. V. Alexander): I will, with permission, circulate a table in the OFFICIAL REPORT.
The relationship between Service and civilian ration scales is kept under review by an Inter-Service Committee under Ministry of Food chairmanship; the Committee is at present considering what reductions should be imposed on the Services to correspond with recent civilian reductions.

Sir J. Lucas: While thanking the right hon. Gentleman for his reply, may I ask if he will add details of the potato ration to the list if they are not on it?

Mr. Alexander: I will see if that can be done in time, but if not I will have it done separately.

Squadron-Leader Fleming: Is it not a fact that Service rations are generally greater in quantity than those given to civilians?

Mr. Alexander: I think it is necessary to study the table and to take into consideration the overall consumption of civilians, apart from the actual weekly ration, but we will do our best to obtain a fair adjustment in the matter.

Following is the table:


RATIONS OF CERTAIN COMMODITIES FOR THE FORCES IN THE UNITED KINGDOM.


(Ounces per week unless otherwise shown.)


——
Navy.
Army and Air Force.
Civilian ration.
Civilian average consumption (provisional) (a).


Men.
Women.
Men.
Women.


Meat (including tinned meat, offals and sausages).
35
31·9
36·75
31·9
IS. worth(b) (i.e., about II OZ.).
23·3


Bacon and ham
7
5·5
7
6·3
1


Bread unit goods
13½ B.Us.
9 B.Us.
67·5
47·8
9 B.Us.
68 (approx. 12·5 B.Us.).


Sugar (including jam, sweets, etc).
18·6
18·6
19·4
21·3
8 (c)
21·7 (d)


Notes:


(a) Current overall average covering all age groups and occupations—estimated by the Ministry of Food and allowing, in the case of sugar, for the cut already announced which takes effect in January, 1948.


(b) Excluding tinned meat (on points), offal and sausages (not rationed).


(c) Excluding sugar content of jam. sweets, etc.


(d) This figure is not comparable; it includes all the sugar allocated for composite foods, e.g., biscuits, cakes, sweets, jam, etc., and for brewing amounting in all to 9·84 oz.

Deserters

Mr. Austin: asked the Minister of Defence to what extent his regulations oblige deserters after apprehension and service of sentence of imprisonment, to fulfil their remaining Service obligations, in accordance with normal age and service conditions.

Mr. Alexander: Time spent in desertion and periods of consequential imprisonment or detention do not count as service for release purposes. In August last we decided that in the case of non-Regulars service previous to desertion and service subsequent to detention or imprisonment including service under suspended sentence should count in full. This change placed National Service men serving under the earlier Acts in the same position in this respect as those to whom the First Schedule of the National Service Act, 1947, will apply.

Mr. Austin: Does that mean that after serving a sentence of imprisonment, if a man has another three or four years' service to complete, he will be required to fulfil that obligation?

Mr. Alexander: I think he will be required to fulfil his obligation. In the case of National Service men called up

during the last three or four years, subject to the period of detention or desertion, they are subject to the same rate of scale-off as the others who have been scaled off.

Mr. Austin: asked the Minister of Defence whether, with a view to obtaining a greater volume of surrenders by deserters, he will consider reforms whereby sentences of imprisonment be suspended subject to the good behaviour in accordance with Service obligations of the individuals concerned, such suspension to be translated into complete remission at the end of fulfilment of satisfactory Service obligations.

Mr. Alexander: Sentences of imprisonment or detention for desertion are reviewed periodically and are frequently suspended after only part has been served. I could not agree to any general rule of suspension in such cases. I have already stated to the House the general objections to further leniency and it will be recognised that punishment must vary according to the seriousness of the offence.

Mr. Austin: Is my right hon. Friend aware that his present policy is inconclusive and harsh and is not getting the desired results? Is he further aware that there were 17,500 deserters in March and


21,000 deserters in October, and that many of these men will be deserters and on the run at the age of 80 or 90 when they die?

Mr. Alexander: I must resist the charge that we are being harsh in this matter. A very generous offer was made at the beginning of the year, and several thousand men took advantage of that leniency. All the men had that opportunity. I really must resist any attempt to weaken the general morale and discipline of the Forces.

Mr. Keenan: Does my right hon. Friend consider that any useful purpose is served by hon. Members ventilating their opinions on this question, in view of the position as it is now disclosed?

Mr. Alexander: Hon. Members have a perfect right to ventilate their opinions, but responsible Ministers must take into account the advice of those who have to deal with this matter.

Mr. Leslie Hale: Will my right hon. Friend bear in mind that the presence of 20,000 deserters in this country is resulting in an increase in crime, difficulty in carrying out regulations and a diminution in production, and that considerations of high public policy make it very desirable that an amnesty should be offered?

Mr. Alexander: I do not consider that the facts justify my hon. Friend's suggestion. I understand the matter is to be raised on the Adjournment on Monday.

Reservists

Mr. Austin: asked the Minister of Defence what are the categories of ex-Servicemen assumed to be on the Reserve; and at what date it is intended to cease this obligation; and what is the total number of men involved to the nearest convenient date.

Mr. Alexander: In addition to the Regular reservists, who serve for specified periods, all officers and men who have left the Forces under the release scheme are still members of the Reserve. Their liability to recall will continue until the present emergency is declared to be at an end. The date of termination of the emergency has not yet been fixed. The number involved was about 3,900,000 on 30th September excluding those still on release leave.

Mr. Austin: In view of the considerable number of men involved, does not my right hon. Friend consider that these men could easily pick up the threads of their duties if there was an emergency, and would he not consider that as an argument in favour of further speedy demobilisation of the present Armed Forces?

Mr. Alexander: All these relevant factors have been taken into consideration.

Major Legge-Bourke: Would the right hon. Gentleman consider, after the expiration of the period of emergency,  king some plan whereby he could call these men to join a special section of the Reserve for a further considerable number of years?

Mr. Alexander: I will make a note of the hon. and gallant Gentleman's suggestion.

Oral Answers to Questions — FOOD SUPPLIES

Fats and Potatoes (Fish Friers)

Mr. Osborne: asked the Minister of Food if he is aware that Mr. R. Kirkby, of Bradley Cross Roads, Grimsby, has been making applications to his Department for the last 12 months for increases of fats and potatoes on account of the three housing estates which are being developed near his shop; and, in view of the hardship which the recent cuts are causing, if he will have the matter reconsidered in the light of the correspondence sent to him.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summerskill): I have re-examined this case and am satisfied that Mr. Kirkby is receiving his fair share of the supplies which are available. He benefited by the increase, granted in June last year, to fish friers in the Grimsby area. The supply position precludes any further increase of either fats or potatoes.

Mr. Osborne: Will the hon. Lady consider giving her regional officers some discretion to deal with areas where the population is obviously growing and there is a great demand?

Dr. Summerskill: If the hon. Gentleman will look at this case again he will find that the biggest housing estate, which is adjacent to this fish shop, is served by another fish shop on the boundary.

Mr. Anthony Greenwood: Will the hon. Lady bear in mind that there are many similar cases in all parts of the country, and that there is a feeling that the present datum period is very unsatisfactory?

Mrs. Castle: asked the Minister of Food whether he will ensure that no reduction is made in the allocation of fat to fish friers, who, as a result of the shortage of potatoes, are prepared to fry larger quantities of fish.

Dr. Summerskill: It is not the present intention to reduce allocations of fats to fish friers on account of the potato shortage, but as I said in reply to my hon. Friend's Question on 24th November, in the present uncertainties of the fats supply, we cannot ensure that no reduction will be made later on.

Mrs. Castle: asked the Minister of Food whether he is aware that general catering establishments are still able to maintain the size of the portion of potatoes served to customers; and, in view of the particular hardship caused to fish friers and their customers by the shortage of potatoes, if he will adjust the allocation of supplies further in favour of the fish frier at the expense of the general caterer.

Dr. Summerskill: No, Sir. The reduction imposed on fish friers is already less than that on caterers, and I regret that it is not possible to adopt this suggestion.

Mrs. Castle: Is the hon. Lady aware that the fish and chip shop is a vitally important standby for the working class family, and that this cut is imposing much greater hardship on these consumers than on the consumers of potatoes in ordinary, commercial catering establishments? Will she make an adjustment between the two kinds of establishment?

Dr. Summerskill: I think I should point out that, in my hon. Friend's area, it is customary to give a large proportion of chips to a comparatively small proportion of fish, and that that is why she is feeling rather piqued about it.

Mr. Walter Fletcher: Is not the reason which the hon. Lady has given extraordinary proof that, fish being a brain food, there are more brains in Lancashire than in most parts of the country?

Mr. Shurmer: Is the hon. Lady aware that the means of arriving at the reduction of supplies of potatoes for fish filers is altogether wrong, and that it has resulted in a 60 per cent. to 75 per cent. cut in the potato allocation to Birmingham fish friers, which has caused many of them to close on three or four nights a week?

Mr. Erroll: Does the hon. Lady realise that the reduction in the allocation of potatoes is leading to the retention of the system of conditional sales, and that in this case the condition is, no chips without fish? That is a thoroughly undesirable practice.

Dr. Summerskill: No, we have no evidence of that.

Mr. Anthony Greenwood: Will the hon. Lady bear in mind that this question affects not only fish friers, but the cafés catering for industrial workers, and that there is great perturbation about it.

Mr. Mikardo: In assessing the value of the fish and chip shops, will the hon. Lady bear in mind that they are the only justification for large parts of our national Press?

Mr. Lipson: asked the Minister of Food if he will base the allocation of potatoes to fish friers on the amount they previously used over a period instead of, as at present, on the allocation of oil, as that is causing hardship and a sense of grievance.

Dr. Summerskill: No, Sir. The only information which is readily available is on the allocation of oil.

Mr. Lipson: Is the hon. Lady aware that the present allocation in practice works out at a cut of 60 per cent. and over, whereas she stated in answer to a Question last week that the intention was that the cuts should be of only 40 per cent.? Will she not have consultation with the National Fish Friers' Association on the matter, to try to get it adjusted properly?

Dr. Summerskill: I can assure the hon. Gentleman that we did consult the National Association before we adopted this scheme.

Mr. W. Fletcher: Does not the hon. Lady realise that unless she keeps the


fried fish shops going in industrial towns the efforts to get women into industry will be seriously hampered?

Potatoes

Mr. Osborne: asked the Minister of Food if he will consider granting an extra ration of potatoes for children who attend schools where no mid-day meal is provided.

Dr. Summerskill: I regret that this would not be practicable.

Mr. Osborne: Will the hon. Lady bear in mind the cases in small country towns where the fathers of families are not able to get mid-day meals out but must go home for them, which makes it harder for those families when the children cannot get food at school?

Dr. Summerskill: The hon. Gentleman must remember that, if we alter our regulations in respect of this group, we must give similar treatment to the children who live near schools but are unable to partake of meals at the schools. That would mean that our scheme would become unworkable.

Mr. House: Is the hon. Lady aware that if these schoolchildren were given a ration of raw fruit, such as apples, instead of potatoes it would be better for their health?

Mrs. Castle: asked the Minister of Food whether he is now in a position to say what cuts have been made, under his potato distribution scheme, in the supply of potatoes to the Services.

Dr. Summerskill: I am not yet able to add to the reply I gave my hon. Friend on 24th November.

Mrs. Castle: Is the hon. Lady aware that there is a widespread belief, which is fortified by reports from the men in the Services themselves, that there is a good deal of waste of food going on in the Forces? Will she see to it that, when cuts have to be made at home, comparable cuts are made in the food supplies to the men in the Services?

Dr. Summerskill: Yes, but my hon. Friend must remember that these proposed cuts must be confirmed by the Board of Admiralty, the Army Council and the Air Council.

Illipenuts

Mr. Erroll: asked the Minister of Food why he fixed a price of £39 5s. 6d. per ton f.o.b. Singapore for this year's crop of illipenuts; and how much was purchased at this price.

Dr. Summerskill: This price was recommended by our local agents as likely to encourage the maximum collection of nuts. Our purchases amounted to 8,356 tons.

Mr. Erroll: As there is considerable evidence of a higher price and a much larger quantity, will the hon. Lady make sure that a higher price is paid next year?

Dr. Summerskill: We are increasing it by £2 next year.

Mr. Hale: Will the hon. Lady say whether these are animal, vegetable or mineral?

Dr. Summerskill: Vegetable.

Jam

Mr. Douglas Marshall: asked the Minister of Food what is the quantity of jam that we have purchased in Australia; and why was not sugar allocated from store to jam makers in this country in order to deal with our fruit season.

Dr. Summerskill: It is expected that imports of jam from Australia during 1947 will amount to about 10,000 tons. In reply to the second part of the Question, jam makers were given enough sugar to handle all the fruit they could obtain, and, in particular, they have been enabled to process an exceptionally heavy tonnage of plums from this season's good crops.

Mr. Marshall: As my information is contrary to that of the Minister, will the hon. Lady look into the information if send it to her?

Dr. Summerskill: Certainly, but I must remind the hon. Gentleman that we earmarked 200,000 tons of sugar for jam makers and that they have taken up only 180,000.

Mrs. Jean Mann: Would the hon. Lady point out to hon. Members opposite that the jam ration has been increased to two pounds?

Sauces and Pickles (Export Restrictions)

Mr. D. Marshall: asked the Minister of Food what European countries and what Colonies have put up a barrier against the importation of all sauces and pickles.

Dr. Summerskill: Full information is not at present available and the position is constantly changing. If the hon. Member is interested in any particular country, I will obtain the information for him.

Reduced Purchases (Currency Difficulties)

Mr. Turton: asked the Minister of Food whether any available foodstuffs have not been bought owing to currency difficulties.

Dr. Summerskill: I would refer the hon. Member to the statements made in this House by the Prime Minister on 6th August, by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) on 7th August, and by my right hon. and learned Friend the Chancellor of the Exchequer on 23rd October, all of which made it clear that we have reduced our purchases of available foodstuffs, owing to currency difficulties, by a very substantial amount.

Mr. Turton: Are feedingstuffs included in these categories of foodstuffs?

Dr. Summerskill: No.

Milk Consumption, Stoke-on-Trent

Dr. Barnett Stross: asked the Minister of Food what was the average daily consumption of milk per head of the population in Stoke-on-Trent in the year 1935 and in the year 1947.

Dr. Summerskill: It is estimated that the average daily consumption of milk per head in Stoke-on-Trent in November, 1935, and November, 1947, was 0.24 and 0.56 pints respectively.

Dr. Stross: Is the hon. Lady aware that in November, 1935, there were many areas wealthier than Stoke-on-Trent which had twice and three times the amount of milk we could get in my own city? Can we have an assurance from her as a Minister that the present policy of distributing food of this type according to need and not according to income will be continued?

Dr. Summerskill: Yes.

Entertainments (Aged People)

Mr. Sidney Shephard: asked the Minister of Food if he will waive the regulation which limits the number of guests to 100 in those cases where it is proposed to give a free dinner to the aged poor at Christmas and New Year.

Dr. Summerskill: I am very glad to say that this concession has recently been made.

Point Values (Change)

Mr. S. Shephard: asked the Minister of Food which foods on points have been up-pointed during the past six weeks.

Dr. Summerskill: The only points rationed foods which have been up-pointed during the past six weeks are the special soft cheeses which are always reduced in points value during the warmer months to prevent delays in their sale.

Mr. Shephard: Could the hon. Lady say whether there is any intention of putting tinned soup on points in the near future?

Dr. Summerskill: I am afraid I could not anticipate.

Enforcement Inspectors, Westmorland

Mr. Vane: asked the Minister of Food how many enforcement officers have the right of access to domestic or business premises in Westmorland, what are their general powers and what right have they to question persons working on any premises other than the householder or proprietor of the business.

Dr. Summerskill: Westmorland is part of the Northern Food Division in which there are 33 enforcement inspectors who have authority to enter and inspect food undertakings by virtue of the powers conferred on them by Defence Regulation 55AA. They have no powers to enter private premises without a search warrant. An enforcement inspector may make inquiries of other persons in the absence of the owner of a food undertaking, but in such cases it is the general practice for the inspector, before making his report, to see the owner and give him an opportunity of making a statement.

Cheese Ration

Mr. Lipson: asked the Minister of Food if the extra ration of cheese allowed to building workers in rural districts can


be given also to those working in towns, in view of the fact that under their working regulations they have only half an hour for dinner for the six weeks before and the six weeks after Christmas, and so cannot go home for it, and that the extra cheese ration is already granted to other workers in comparable occupations.

Dr. Summerskill: I would refer the hon. Member to the reply to my hon. Friend the Member for St. Albans (Mr. Dumpleton) on 26th November.

Imported Feedingstuffs (Negotiations)

Major Tufton Beamish: asked the Minister of Food if he will enumerate the steps that he has taken to acquire feeding-stuffs for British livestock from foreign countries, showing to which countries approaches have been made during the last 12 months, and with what successes; and what prospects there are of an improvement in the supply of feedingstuffs from abroad in the near future.

Dr. Summerskill: During 1947 we have been in negotiation with 16 countries, including Argentina, Canada, U.S.A., Australia, Russia and Brazil. Negotiations with a number of countries have not yet been completed, and it would be inadvisable at the present time to give further details or to express an opinion on the point raised in the last part of the Question. I am bound to point out, however, that as a result of the poor 1947 harvest supplies of feedingstuffs are disappointingly small throughout the world.

Major Beamish: Can we take it for granted that the Government will continue to handle this whole problem with their usual inefficiency?

PALESTINE (DISTURBANCES)

Mr. Manningham-Buller: (by Private Notice) asked the Secretary of State for the Colonies whether he can make a statement with regard to the grave events reported in Palestine.

The Secretary of State for the Colonies (Mr. Creech Jones): I have not received complete reports yet on recent events in Palestine, but the High Commissioner has already briefly reported incidents on 2nd December, when Arab demonstrations

took place in Jerusalem, Jaffa, Haifa, Nazareth, Ramle, Acre, Tiberias, Beisan and Tarshiha. These disturbances, the High Commissioner informs me, were sporadic and unorganised. In Jerusalem there was mob violence directed against Jews and Jewish property. A number of shops were looted, and there were several cases of arson. Shots were fired by Jews, and possibly also by Arabs, though the latter is not certain. Hagana has been out on the streets in force, and has generally done its best to restrain the Jews from reprisals. Casualties reported are, two Jews seriously wounded, one Jew and four Arabs injured, and one Jewish and two British police injured. A number of Jews with arms were arrested during the day, two of whom had been sniping.
In Haifa, two Jews were injured by Arabs, neither seriously. In Jaffa, Arabs attacked Jewish shops, and police were compelled to make a baton charge. One British policeman was slightly injured. In Lydda, two Jewish clinics were sacked by Arabs. There were a number of cases of Arabs holding up and stoning Jewish transport in the Lydda district. These incidents resulted in one Jew being fatally injured, one Jew seriously injured, and one Jew slightly injured. A fourth Jew was injured when a bus was fired on near Ramle. Among other incidents reported was one near Roshpina, where a car containing Jewish Supplementary Police was held up and stoned by Arabs. Jews fired warning shots and escaped injury. Subsequently, an Arab was found dead in the vicinity, and an injured Jew named as his assailant was found in a nearby colony. He claimed to have been beaten by Arabs. I should add that the Palestine Government is responsible for the maintenance of law and order until the Mandate is finally surrendered, and will continue to take all possible steps to preserve order and to prevent such tragic and unhappy conflicts. The Arab leaders in Palestine are fully informed of this.

Mr. Manningham-Buller: While I thank the right hon. Gentleman for the statement which he has made, may I ask him if he will pay tribute to the conduct of the British troops and Palestine Police in these most distressing and difficult circumstances; have they not done all that it lay within their power to do to keep. order?

Mr. Creech Jones: Yes, Sir. The Government, of course, would wholeheartedly associate themselves with the sentiments expressed by the hon. and learned Member. I hope shortly to make a statement in regard to Palestine, and then I can say something about the excellent work which the Police and the Service have performed.

Mr. H. Hynd: In these new circumstances, is Hagana getting every facility to maintain order, including the right to bear arms?

Mr. Creech Jones: That is a point which can be put to me when I make a statement a little later on.

Mr. Thurtle: In view of the exacerbation of feeling which has taken place as a result of the United Nations organisation's decision in favour of partition, can my right hon. Friend say how long he proposes to maintain British soldiers in Palestine in order to keep the peace between the two races?

Mr. Creech Jones: The British Government will be responsible for law and order until the Mandate is surrendered. The British troops will be withdrawn, and we hope that the final withdrawal will be by 1st August of next year.

Sir R. Glyn: Can the right hon. Gentleman state if any special constables are being enlisted to assist the Palestine Police; and, if so, whether they are being drawn equally from Arabs and Jews, and not only from one side?

Mr. Creech Jones: Some steps are being taken to augment the existing arrangements for the preservation of law and order. However, I would prefer to cover that point in the statement which I make on behalf of the Government some time very soon.

Sir R. Glyn: Does not the right hon. Gentleman realise that if there is any misapprehension that special facilities are being given to one side or the other it will increase the risk of disorder; and therefore, will his statement be made very soon?

Mr. Creech Jones: The statement will be made very soon. I fully appreciate, and so does the High Commissioner, the point which the hon. Member makes.

Mr. Thurtle: Is the right hon. Gentleman aware that sometime ago his right hon. Friend the Foreign Secretary said that, if a situation arose in which the United Nations organisation created a certain strong feeling between Jews and Arabs, British soldiers would not be used to keep the peace?

Mr. Creech Jones: I have made it perfectly clear that, while the British Administration is functioning in Palestine for some months ahead the British Government must remain responsible for law and order.

Air-Commodore Harvey: Are British women and children still allowed to return to Palestine to rejoin their husbands and fathers?

Mr. Creech Jones: Many women and children have returned to Palestine in recent months.

Air-Commodore Harvey: Are they still allowed to return?

Mr. Edward Davies: Can the Secretary of State inform the House what arrangements are being made to preserve the peace in Palestine after the withdrawal of British troops?

Mr. Oliver Poole: When the right hon. Gentleman makes his statement, will he pay particular attention to the employment of the Transjordan Frontier Force?

Mr. Creech Jones: That point will be covered in the statement.

Major Legge-Bourke: Can the right hon. Gentleman give an assurance that British troops have not now to wait until they are shot at before they use their own arms? May I have an answer?

Mr. Creech Jones: I should have thought that an answer was hardly necessary. The British authorities in Palestine have very definite responsibilities which they must discharge so long as the Mandate is held by Great Britain.

Mr. Warbey: Can my right hon. Friend give an assurance that His Majesty's Government will co-operate loyally with the United Nations in carrying out the decision of the General Assembly?

Hon. Members: Oh!

Mr. Creech Jones: I shall make a statement on this matter at a very early date.

BILLS PRESENTED.

REQUISITIONED LAND AND WAR WORKS BILL

"to continue certain provisions of the Requisitioned Land and War Works Act, 1945, to make permanent certain other provisions thereof, and otherwise to amend that Act; to amend the Compensation (Defence) Act, 1939, as respects compensation for the taking of possession of land; to make further provision, by the amendment of those Acts and otherwise, as respects the maintenance and use of certain oil-pipe lines and the compensation therefor; and for purposes connected with the matters aforesaid," presented by the Chancellor of the Exchequer; supported by Mr. A. V. Alexander, Mr. Key, and Mr. Glenvil Hall; to be read a Second time upon Monday next, and to be printed [Bill 23.]

SUTTON'S HOSPITAL IN CHARTERHOUSE BILL

"to confirm a Scheme of the Charity Commissioners for the application or management of the Charity called Sutton's Hospital in Charterhouse, in the County of London," presented by Mr. Philips Price; to be read a Second time upon Monday next; and to be printed. [Bill 24.]

BUSINESS OF THE HOUSE

Motion made, and Question proposed,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Mr. H. Morrison.]

Captain Crookshank: Before this Motion is agreed to, could we ask what Government Business is to be taken today?

Mr. H. Morrison: Yesterday, I did announce the Business for today. The purpose of this Motion is merely precautionary, and is in relation to the Ministers of the Crown (Treasury Secretaries) Bill. It is purely precautionary and I do not imagine we shall be in any difficulty.

Question put, and agreed to.

MINISTERS OF THE CROWN (TREASURY SECRETARIES) BILL

Resolved:
That if the Ministers of the Crown (Treasury Secretaries) Bill be committed to a Committee of the whole House further proceeding on the Bill shall stand postponed; that any Resolution come to by the Committee on Ministers of the Crown (Treasury Secretaries) [Money] may be reported and considered forthwith notwithstanding anything in Standing Order No. 69; and that as soon as the proceedings on Report of the Resolution have been concluded the House will immediately resolve itself into a Committee on the Bill."—[Mr. H. Morrison.]

Orders of the Day — FINANCE BILL

Considered in Committee [Progress, 2nd December].

[Major MILNER in the Chair]

CLAUSE 7.—(Increase in profits tax rates.)

3.40 p.m.

Sir John Mellor: I beg to move, in page 4, line 46, at the end, to insert:
Provided that in the said subsection (2) where the difference therein referred to or any part thereof represents sums paid or set aside for the amortisation of leasehold interests in land or of other wasting assets calculated upon an actuarial basis the reduction shall instead of being an amount equal to 15 per cent. be an amount equal to 20 per cent. of the said difference or of the part thereof as the case may be.
I should mention that I have some private interest in this matter. This is a very modest Amendment. It is designed to secure that sums paid or set aside for the amortisation of leasehold interests in land, or of other wasting assets calculated upon an actuarial basis should be exempted from the increased rate of Profits Tax. I am asking for this modest relief in the hope that the Government may be agreeable to it. In asking for it I must not be taken as abandoning the claims I have pressed before that such sums applied to amortisation should be excluded from all taxation. The Committee decided last night that the 10 per cent. Profits Tax on undistributed profits should stand, and although I voted against that, I should not be permitted now to challenge the wisdom of that decision. For the purposes of this Debate, I must accept the position as it stands as a result of last night's decision. It is my purpose to endeavour to draw a distinction between the rather narrow and more special case which I am about to argue, and the more general case which was argued last night. In my submission, there is a clear distinction between taxing the generality of undistributed profits, and taxing the particular class of appropriations with which this Amendment is designed to deal.
My point is this. A company with a wasting asset has no option, in any real sense of the word, but is hound to make some provision for the amortisation of

that wasting asset. There are several professional accountants in this Committee, and I see the hon. Member for Blackley (Mr. Diamond), who made a contribution to last night's Debate, sitting opposite. I hope he will agree that if a company refrained from making due provision for the amortisation of wasting assets, it would be the duty of an auditor to comment upon it in his report to the shareholders. In my submission, that portion of the gross income which, according to proper commercial practice, should be applied to a sinking fund, is not really income in the true sense of the word, but is really a return of capital.
3.45 P.m.
This is where I am endeavouring to distinguish between this special class and the generality of undistributed profits which we discussed last night. In my contention, such money is not only not distributed, but is undistributable. Take the case of a company requiring to find £100 a year for the amortisation of a wasting asset. It is a fact that, with the Profits Tax at the rate proposed, namely, 10 per cent., and with Income Tax at 9s. in the £ that company would have to earn £202. Therefore, I hope that the Committee will appreciate what a very grave burden it is upon companies which desire to conduct their business in a proper way to have to pay Income Tax and Profits Tax upon the amount they require to set aside for sinking fund purposes.
It would appear that the Government have not desired to discourage such a sound business practice until this question of the Profits Tax arose. I should like to refer to the Report of the Central Advisory Committee on Estate Development and Management. This committee reported early this year, and its report contained the following passage:
The need for periodic redevelopment renders it very desirable that lessees should 'write-off' their buildings over the period of their estimated useful life … We recommend this practice and suggest that local authorities should advise its adoption by all lessees.
Apparently the Government approved that recommendation, because the Ministry of Town and Country Planning sent a copy of that report to all local authorities.
Throughout the discussions which have taken place both on this Bill and upon


the Budget, it has been made abundantly clear by the Government that these taxes are not imposed for revenue purposes. We were told last night by the Financial Secretary that there is an estimated surplus of something like £300 million. It is not for the sake of revenue that these taxes are being imposed; it has been stated over and over again that they are being imposed to check inflation by reduction of purchasing power. No question of inflation can arise over putting money aside for sinking fund purposes, because it is frozen there unless and until it is used for replacement of the wasted asset. I believe that money set aside into a sinking fund fructifies in a far more useful way than it could ever fructify in the hands of the Government. The Chancellor of the Exchequer, on 17th November, in winding up the Budget Debate, said:
Furthermore, the tax on undistributed profits is a good anti-inflationary measure, which will tend to stop people spending so much money at this moment in the capital goods market. They will put it aside, I hope, and invest it in Government securities."—[OFFICIAL REPORT, 17th November, 1947; Vol. 444, c. 941.]
That is just what will happen when the money is put into a sinking fund. In nine cases out of ten it will go into Government securities and fructify in a way in which, I am sure, the Financial Secretary would not disapprove.
Continually, we are being told that the Government desire that industry should not distribute its profits to shareholders, but should plough them back into the business. The Financial Secretary said last night that it was the desire of the Government to prevent such money being used for "anti-social" purposes. I argue that if this money is put into a sinking fund it cannot possibly be used for any purpose which can be described as inflationary or anti-social. If it should be considered that the words, "sums paid or set aside," do not tie up the money into a sinking fund with sufficient certainty, I should be glad to have any suggestions which the Government would wish to make for ensuring that the money is tied up tightly. But what I want now is to get some acceptance of this principle. What real purpose can the Government have in mind in wishing to tax money which is to be applied, if the business is properly conducted, to a sinking fund? Surely,

they cannot wish to penalise sound business methods. I, therefore, hope very much that this Amendment will have a sympathetic reception.

Mr. Gammans: I would like to support this Amendment. I should have thought that if there was one category of business about which there could be no argument, it was in regard to money which has to be set aside for amortisation of leaseholds. I hope no one will deny that leaseholds are a wasting asset or that any prudent landlord must set aside sufficient money each year to meet that wasting asset. The Government must make up their minds about the grounds on which they are justifying this increased tax. Last night, the Financial Secretary said that the main reason was to prevent inflation, and then went on to suggest another reason—that the Government wanted to collect a bit of money. Is it the one, or the other, or both? If it is anti-inflationery there can be nothing inflationary in owners of property setting aside money to meet their amortisation charges. There is certainly nothing anti-social in doing that. Indeed, if they did not do so they would be committing an anti-social act, because a large part of the property of this country, held on leasehold, would gradually become slum property because the money to keep it up and pay for it was not set aside each year. Therefore, whatever the argument of the Government may be on this matter I hope we shall not hear that argument from them.
If the idea is that the Government need more money, and that this is a sort of taxation on property, I would point out two things: first, that this tax applies only to companies, and not to private individuals. Straightaway, there is unfair differentiation between two classes of property owners. It is worth while remembering that of all the sections of the business community in this country which are working at a disadvantage property owners come near the top of the list. They are trying to maintain their property on prewar rents and they are not allowed to make any further charges for the increased cost of repairs. Quite apart from the general principle which we argued last night, when I voted against the Government, I hope we have succeeded in convincing the Government that


this is a special case. When it is considered that over £200 must be set aside to earn £100, I should think that that in itself was sufficient argument. We are not asking for this concession in a narrow sense; we are asking for something which is fair and reasonable, which is to the long-term interest of the country, and which is eminently sensible.

The Solicitor-General (Sir Frank Soskice): I would like to deal with the Amendment under two headings. It relates to two separate categories of assets, one wasting assets and the other leasehold interests. May I deal first with the general category of wasting assets? Provision has already been made for that type of asset by special deductions for the purposes of computing tax. I refer to the Income Tax Act, 1945, and also the Finance Act, 1944. The 1945 Act was specifically designed to create a code of deductions in relation to various types of wasting asset and, broadly speaking, provides for initial and annual allowances against tax in respect of various categories of assets. They are industrial buildings—already widely defined—plant and machinery. The 1944 Act deals with scientific research, and the 1945 Act also deals with mineral rights and money expended on the acquisition of patents.
All these assets, which cover a very wide range, are brought within the scope of these two Acts, and special provision is made on what was considered to be a generous scale, for deductions against tax liability in the form of initial and annual allowances. Until the 1947 Finance Act, these allowances were not available against Profits Tax. Section 46 of the 1947 Act is specifically framed to make these Income Tax allowances available also against Profits Tax. The result is that if this Amendment is adopted with regard to wasting assets generally, there will be virtually a double allowance—the allowance provided by the 1945 and 1947 Acts, and the special allowance which would result from the adoption of the Amendment. That is why I hope that the Committee will agree that, with regard to that particular limb of the Amendment, the arguments advanced cannot be accepted. I might say, in passing, that I do not see how the hon. Member for Hornsey (Mr. Gammans) arrived at the figure of £200 upon an expenditure of

£100, but possibly he failed to make out the fact that Profits Tax is itself a deduction for Income Tax. I make the figure a good deal less. This is, however, not fundamental to my main argument.
4.0 p.m.
The provision of funds for the amortisation of leasehold interests raises a very old controversy. It goes back to the report of the Royal Commission on Income Tax which was prepared and delivered in 1920. The Members of the Commission investigated the question of providing some system whereby an annual or some similar form of allowance could be made to provide for amortisation of sums set aside in respect of leasehold interests. They reported that, in their view, it was not feasible to do so, because if they gave an allowance in respect of wasting leasehold interests, they must recoup the Revenue in some way in respect of the allowance given to the owners of the leasehold interests. If the leasehold interest was disposed of, it was said that the sum paid must be taxable in the hands of the recipient. That was the suggestion made, and on that they tried to work out a system whereby that could be done, and they reported that it was impossible to do so.

Sir J. Mellor: I agree with what the hon. and learned Gentleman has said about the report of the Royal Commission on Income Tax in 1920, but they were concerned about protecting the Revenue. Is not the distinction now that the Government are not concerned with getting revenue, but concerned with preventing inflation, which was not the problem which confronted the Income Tax Commission in 1918?

The Solicitor-General: I do not want to travel beyond the scope of the argument which I am addressing to the Committee, but I think it should be remembered that all Budgets are to get revenue, and the way we are trying to relieve anti-inflationary pressure is to collect extra revenue to prevent too much purchasing power being available. The Committee may say that 1920 is a long time ago, but the question has since been considered.
The right hon. Member for the Scottish Universities (Sir J. Anderson), who was Chancellor of the Exchequer in 1944, in announcing his proposals for postwar taxation, dealt with this matter of lease-


hold interests. In his Budget statement, he contrasted the position of leasehold interests with the position of patents. I will state shortly what he said. He said that a similar issue arose in the case of leaseholds where the land was granted on payment of a premium in addition to the lease rent. The position of leasehold was much more complicated, and while he would like to propose operating the application of a similar principle to that which he had outlined for patent rights, he could say no more than that this subject also would be further considered. The matter which he had in mind was subsequently embodied in the Income Tax Act, 1945, and in relation to patent rights there is a section of the 1945 Act which provides that sums received on the sale of patent rights are in fact themselves taxable. It would not be possible to apply the same principle to leasehold interests.
The matter has been further considered since the right hon. Gentleman made his statement, and the result is that it has not been found possible to adopt any similar principle for the purpose of leasehold interests. The net result is that the Income Tax legislation does not provide any system of relief in relation to wasting assets in the nature of leasehold interests. If the Income Tax legislation does not contain such provision, it is not feasible or consistent that the Profits Tax legislation should do so either. Profits Tax is based on the old National Defence Contribution, and both the old tax and the Profits Tax are computed and assessed on Income Tax principles. It has not been possible to do it for one Tax, equally, therefore, as a matter of consistency, it cannot be introduced into the other Tax, even if it were feasible to do so.
To sum up: With regard to wasting assets other than leasehold assets, there is already provision made in other Acts—the 1944 and 1945 Act; so if this Amendment were adopted there would be a double relief afforded in respect of them. With regard to leasehold interests, the matter has been frequently considered since as long ago as 1920, and it has not so far been found possible to work out any appropriate system.

Mr. Gammons: Would the learned Solicitor-General explain why it is feasible to make this allowance in the case of

industrial leaseholds, and not in the case of leaseholds generally?

The Solicitor-General: The question is practicability. In the Income Tax Act, 1945, in relation to expenditure, on industrial buildings and only on industrial buildings, there is contained a system of relief for expenditure on the construction of the buildings themselves. That is scarcely applicable in the case of leaseholds which ex hypothesi are already in existence, and in which there is a diminishing interest on the leasehold building itself. Therefore, the Income Tax Act, 1945, is designed for a different object as regards industrial buildings as against general leasehold buildings, and its scope is not such as to embrace a leasehold building. If relief is granted with regard to leasehold building, and no corresponding provision is made whereby the Revenue recoups itself from somewhere, as the years go by the Revenue is buying the leasehold building for the owner of it, or the leasehold interest for the owner of that interest.

Lieut.-Commander Gurney Braithwaite: I am sure that the Committee are indebted to the learned Solicitor-General for giving so much data on what is admittedly a somewhat complicated matter. It is clear that amortisation puts a rather different angle on this matter from that which we, were discussing last night. There is one specific point which I would like to put to the hon. and learned Gentleman. This Debate has turned naturally, owing to the framing of the Amendment, on leasehold interests, but it also refers to other wasting assets, and that is one of the matters which I wish to submit to the Government. The hon. and learned Gentleman said that the object of the Budget was twofold: revenue raising and a defence against inflation. I think he would not quarrel if I said that it also seeks to work out general defences for the economic position of the country at the present time.
One weakness in the present situation was explained to us by the hon. and learned Gentleman, who said that the Profits Tax is the heir of the old National Defence Contribution, which was first introduced in 1937 and had the limited objective of providing funds for rearma-


ment. Since then, a great deal has happened to the whole economic structure of the country, consequent upon a long, and exhausting war. I suggest that there is one aspect of the matter which ought to be looked at with considerable care between now and April. I do not think it can be dealt with now. I refer to the position with regard to amortisation of gold mines, primarily in South Africa, but registered in London. Surely one of the defences necessary at the present time is to look towards South Africa for the production of the gold which we shall need as we go along, as a backing for our currency. At the moment, our gold reserves are leaving the country at alarming speed and we all look to the time when that process may be reversed and the bullion position can be built up again and strengthened.
The hon. and learned Gentleman also told us—he appears now to be examining some book of reference which probably bears upon the point I am making, but I do want him to hear what I have to say—that there were other provisions for amortisation under other Statutes. All that being true, is it not time that we looked carefully at the impact of this kind of taxation upon what is one of the great assets of this country and the Empire, namely the gold mining industry in the Union of South Africa? A number of those companies are registered here. It is a problem. While not pressing this point any further at the moment, I suggest that it might be a matter for cogitation between now and April.

4.15 p.m.

Mr. Eccles: The Solicitor-General left the Committee under the impression that the Section of the Income Tax Act, 1945, which deals with mining properties covers all their expenses which may be classed as wasting assets. The hon. Gentleman was not with us when we were discussing that Act. If he had been, he would remember that we had a long argument because the mining industry did not feel that those allowances covered anything like the total expenditure of preparing a mine for production. Therefore, I think the point ought to be made again that sooner or later, if we wish to encourage mining in the British Empire, we shall have to tidy up that Section of the 1945 Act.

Sir J. Mellor: Perhaps I may say one or two sentences more. The Solicitor-General dealt with this matter with his usual courtesy and ability, but I regret that he took refuge in technicalities. There is a wider aspect of this matter, which I endeavoured to put forward. I know that he was on fairly safe ground in saying that it is provided that the Profits Tax shall be assessed on Income Tax principles and in referring to what the Royal Commission said, and so on, but he seemed rather careful to avoid the main point which was put to him that this taxation—so we have been told by the Government time and time again—is being imposed not to get revenue but to counter inflation. I am very sorry that he did not deal with my submission that sums put into a sinking fund cannot possibly have any inflationary effect. They are put there in accordance with sound business principles, which should be encouraged and not discouraged by the Government. I confess that I was disappointed with the Solicitor-General's answer.

Amendment negatived.

Mr. Eccles: I beg to move, in page 5, line 6, to leave out from "shall" to the end of the Subsection, and to insert:
have effect from the thirteenth day of November nineteen hundred and forty-seven.
The purpose of the Amendment is to alter the date at which the tax comes into operation. If not amended, the Clause will bring the tax into operation as from 1st January last, that is, it will be retrospective. We consider that to be bad in principle and we desire that the date shall be the day on which this increase in the rates of Profits Tax was announced.
Some companies closed their books for this year before the Budget was introduced. They held their general meeting, declared their dividends and distributed the dividends. Their shares have been bought and sold on the basis of those accounts and those distributions. Those companies also calculated a large number of commissions and bonuses which are payable in relation to the annual profits, and have made the payments in respect of those calculations. I particularly wish to draw the attention of the Financial Secretary to the Treasury to the fact that a large number of distributions of that kind will have been made to managements. The Chancellor of the Exchequer


made a most extraordinary statement when winding up the Debate on the Second Reading of the Bill. He said:
Management is the technician, who does not share in the profits."—[OFFICIAL REPORT; 25th November, 1947; Vol. 444, C. 1921.]
Of course, that statement is entirely wrong. A very large number of managers are given bonuses based upon the annual net profit.
The result of making this tax retrospective to 1st January last is that such calculations as I have mentioned will be upset. One does not know how they will now be treated. It is bad in principle to adopt retrospective taxation. If this practice continues, auditors will have to add the words "subject to future legislation" when they attach their certificate to annual balance sheets. Such a development would be thoroughly bad for the reputation and stability of British business. I feel sure that the Committee will therefore adopt our Amendment, which is fair and is in accordance with sound practice.

Major Haughton: I support what has just been said by my hon. Friend. I tried to deal with this point on the Second Reading, and I was greatly encouraged at that time by something which the Financial Secretary said earlier in the Debate. I am thinking particularly of companies which close their accounts and publish their balance sheets without qualification of any kind. Only one answer was put forward to the three questions which I put to the right hon. Gentleman during the Second Reading. Those questions were: Have the companies done anything wrong? Have they broken any law or order? Was there any reason why they should not publish their balance sheets, in the light of the Finance Act of 1947? The Chancellor replied very late in the evening that it was quite wrong to say that there had been no precedent for making it retrospective. I do not think that anybody on this side of the House said there had not been a precedent, but certainly there was no precedent in peacetime.
It is true that the Excess Profits Tax was made retrospective during the war, but if retrospection in taxation of this kind is to be established, uncertainty is bound to occur and confidence, which is so important in industry today, will be

damaged. I submit to the Financial Secretary that this is not a petty thing but a perfectly reasonable proposal which we are putting forward. The Amendment substantiates what I and my hon. Friends on this side of the Committee said when we argued this point on the Second Reading, and I hope, in view of the fact that many, many companies away back from September to midsummer, have published their balance sheets, that the Financial Secretary will concede this point and make the incidence of this tax date from the passing of the Resolution.

Mr. Selwyn Lloyd: May I reinforce what has been said by my two hon. Friends the Members for Chippenham (Mr. Eccles) and for Antrim (Major Haughton), and ask the Government very seriously to look at this again? As was said by my hon. Friend the Member for Chippenham, the various calculations will have to be remade and will have to be re-agreed with, the authorities and the Income Tax assessments will have to be reopened because all are affected by the Profits Tax liability. My hon. Friend also referred to the general unsatisfactory nature of retrospective legislation. Might I also suggest that this Subsection militates against two sound principles in regard to the levying of taxation? Firstly, there is the question of certainty in taxation.
The Solicitor-General will be very well aware of the importance which the courts have accorded to that principle in the past. If I may remind him—though I am certain he will not need reminding—of what Mr. Justice Rowlatt said on this matter in the case of Anderton and Halstead against Birrell in 1932 which was approved by Mr. Justice Lawrence, as he was then, in the case of Dodworth v. Dale in 1936. Both of these learned judges refused to allow the reopening of properly settled taxation assessments because of the principle that there must be certainty in taxation. Now we find the Government coming along and seeking to reopen a large number of properly settled taxation assessments.
The second principle against which this offends is that the collection and payment of taxes should be as simple as possible. This provision is going to involve a great deal more work for accountants and tax collectors and for the Inland Revenue authorities. In fact, it almost seems as


if the Government's intention is to make the real basic industries of this country accountancy and tax collection. The Financial Secretary and the Chancellor of the Exchequer must be aware of the vast arrears of work which are outstanding in the Inland Revenue Department. An immense amount of calculations have still to be made and agreements still to be given to various matters, and yet they propose to pile on to the already overburdened officials a whole new set of calculations in respect of matters which those officials firmly believe were agreed.
The only other matter to which I want to refer is the statement which the Chancellor of the Exchequer made on the Second Reading of the Finance Bill in regard to this matter when he said:
Indeed, it has been quite a common factor that taxes upon profits put on for emergency purposes, as is this one, should be made retrospective. That has been the common practice of this House for that class of tax. I see no reason to depart in this case from that common practice."—[OFFICIAL REPORT, 25th November, 1947; Vol. 444, c. 1921.]
That just is not the case. The precedents, so far as I have been able to discover them for this type of provision, are first of all, that with regard to E.P.T. in the Finance (No. 2) Act, 1939. My suggestion is that that was a different kind of tax, levied under different circumstances and made retrospective for quite different reasons. In the first place, the outbreak of war itself constituted a complete break in the economic or financial system, and everybody knew that all accounts would have to be reopened and reconsidered because of that complete break. Then there was also already in existence the Armaments Profits Duty from 1st April of that year which did cover a portion of the field, and, therefore, the fact of making the E.P.T. provision retrospective in the Financial Act (No. 2), 1939, rather simplified matters, because of the existence already of the Armaments Profits Duty.
That is the first precedent for this. The other class of precedent is where there has been deliberate avoidance of either actual or anticipated taxation on a large scale. In those cases provision has been made for retrospection, and I think everybody is agreed that that is right if there is a deliberate avoidance beforehand of actual or anticipated taxation. No one disputes in such cases that the taxes

should be made retrospective, but that is not the case here. I ask the Government to think again on this matter. It may be in their view that the 13th November is not the right date. At one time I thought 1st January, 1948, would be better, but it might be that 1st October, 1947, would be a better date. However, I ask the Government to look into this matter again and to promise that something will be done to meet our objection.

4.30 p.m.

Sir Peter Bennett: I will not cover the ground already covered by my hon. and learned Friend, but I should like to ask the Financial Secretary to give this matter careful consideration. I am puzzled why 1st January is the date chosen by the Government. It was not the date of the original Budget; it was not the date of the Government's own financial year; and I can only presume that it has been chosen because it was felt it was the beginning of the calendar year, and as the event has taken place during the present calendar year, it would make a tidy arrangement if all accounts finished at the end of December and there was a full year's taxes.
Many industries do not base their financial year on the calendar. The industries with which I am connected very seldom base their year on the calendar. They base their year on when the summer comes to an end and when changes are made at the end of a summer to be ready for the next season. Consequently, the year ends with them at the end of July or August and this tidy arrangement of going back to the 1st January becomes very untidy. Reference has already been made to the fact that several industries take stock, and if they are prompt in doing so they get their balance sheets through and have it all dealt with as quickly as possible. Now they have this charge falling on them which will cause quite a considerable amount of work and a good deal of dislocation.
Perhaps I might correct the statement of the Chancellor of the Exchequer that the managements have no interest in this matter. I have just been signing several hundred cheques for bonuses to managements and technicians which are based upon profits. I could produce hundreds of people engaged in management who would say that they had an interest in


profits. If there had been no profits they would have had no bonus. The Chancellor is a fair-minded man and I am sure that he would not have said that deliberately. I am, therefore, giving him this evidence in order to prove that he is making a mistake. This only goes to prove the point we are making, that retrospective taxation hurts in many directions. I have no intention of penalising the people who have had bonus cheques, and I am quite sure the Chancellor would not put us in a position where that procedure would be illegal. I appeal to the Financial Secretary to meet us in this and to abide by the well-known British principle that we do not have retrospective taxation. I ask him to fix a date which will obviate the necessity for all these matters to be reopened and gone into again.

Mr. Walter Fletcher: I wish to reinforce the remarks of the hon. Member for Edgbaston (Sir P. Bennett) in one particular. If there is an increasing doubt in the minds of the business world about retrospective taxation, the result must inevitably be that people will try to produce their balance sheets just after the Budget in order to be able to produce accounts which will have some certainty and will not have to be adjusted. The result of that will be a great concentration of work for the Revenue authorities and for the auditors at one particular time. Nothing could be worse from every point of view. At the moment, industries make up their balance sheets at a time that fits in with their type of business. In order not to have hanging over them this cloud of retrospective taxation they are bound to alter the date and concentrate on a particular time.

Mr. Jennings: Because the Chancellor says that there is a precedent for this case, that does not make the case any better. It is quite wrong to have certified accounts and audited figures and then to have the accounts reopened and commission agreements, reserve accounts and almost all one's closing figures altered. One hon. Member said that the Government seemed to be aiming to give auditors and accountants more work. I see two colleagues on the other side who, with me, should not object to that, but if we take a strictly professional point of view, we are very much against retrospective

taxation. It ought not to be done if it can possibly be avoided. The Excess Profits Tax was in a different category. There was an emergency and there had been large contracts before E.P.T. was imposed and some of the tax had come along before the Act. The position today is not quite the same. The fact that there is a precedent for it does not make the bringing in of another item on the same lines any better. I feel that it is a bad thing for the country as a whole to bring in retrospective taxation.

The Solicitor-General: I am sorry, but we feel that we cannot accept the Amendment. I will come straight to what I think is a consideration which will weigh with hon. Members opposite and possibly my hon. Friends. That is the amount that this Amendment would cost. The estimate is that at present profit levels the increase in Profits Tax should, in a full year, bring in ·5 million. But the Profits Tax is a deduction against Income Tax and, allowance being made for the fact that it ranks as such a deduction, the net result will be no less than £47 million in a full year, which is a very substantial amount. The proposal is that the tax should not operate until 13th November, 1947. That means that some 8/9ths of that £47 million will be lost, or £42 million. Unless a very strong case can be made out for losing that amount of revenue, I feel the Committee would agree with me that the Amendment cannot be accepted. It may be said that the principal object of this Budget is to prevent inflationary pressure. A very substantial contribution to that will be to mop up £42 millions of purchasing power.
It is not as if there were not precedents for this type of retrospective legislation—and cogent precedents which come very close to this case. Several hon. Members opposite have mentioned them. Perhaps I might go through them in order to get them strictly in order. The first was the Excess Profits Duty in the first world war which was imposed by the Finance (No. 2) Act, 1915, in September, 1915, and was made to go back for 13 months to August, 1914. Then came the Excess Profits Tax of 1939 which was made to go back from September, 1939, to April, 1939. When the Excess Profits Tax was increased to 100 per cent.—admittedly


during wartime—that was made to go back from June, 1940, to April, 1940. It is not the case that retrospective taxation has been confined solely to wartime, because in the case of Income Tax there was an example in 1931—again in an emergency period—and there have been three wartime examples. What was done in those four cases is very much what is being done today. A Finance (No. 2) Act was passed in the autumn and in each case the Act was made retrospective.
The hon. Member for Edgbaston (Sir P. Bennett) asked why 1st January had been selected as the date. This is an increase of Profits Tax, and under the Finance Act, 1947, there is a very elaborate provision for starting that Tax as at 1st January, 1947, and cutting off any anterior period of an accounting year before the end of 1946. That is why this increase is made to date from the same time. There is also the consideration to be borne in mind that one of the objects of this tax, as was announced by the predecessor of the present Chancellor of the Exchequer in April this year, was specifically to recoup the Treasury to some extent for the loss which would be incurred as the result of Excess Profits Tax coming to an end as it did at the end of 1946, so that, as it were, this tax follows on logically as from that period.
It is said that there would be a great deal of extra work occasioned, and the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) particularly mentioned the Inland Revenue authorities. So far as they are concerned, I can reassure him, because I am told that this particular retrospective effect will not impose any real extra burden on them. In fact, very few computations of the tax have yet been made but there would be a great deal of extra work if the year were broken when it was nearly run, and broken at 13th November. That would involve a great deal of adjustment in relation to the period before and after that year.
The position of companies affected by the tax has to be looked at too. A great many companies have to prepare their accounts with their taxation liabilities simply left provisional; the accounts have appeared and the amount of the company's liability to tax has not been

assessed at the date when the accounts are closed. So it is not an unusual experience for companies to close their accounts with the knowledge that subsequently, when the tax liability is ultimately assessed, they may possibly have to review certain items which have appeared in the closed accounts. Not only that, but it is not entirely irrelevant to point out that companies which close their accounts, for example, at the end of the year do not know what their Income Tax liability will be until they hear the Budget statement in the succeeding April, so that, in a sense, there is always a certain measure of uncertainty with regard to the tax.
Therefore, I seek to justify this tax on these general lines. I say we are not doing something for which there is no precedent. The Income Tax legislation affords ample precedent. It affords precedents in times of emergency and for that reason at this time, when there is urgent need to take up inflationary pressure, we are justified in this case in following those precedents. If we did not, as I pointed out by reference to the figures, we should be losing the effect to some considerable extent of the tax which we seek to impose from the point of view of its effect on inflationary pressure. Roughly speaking, the result would be this: supposing the tax remains retrospective, the yield in the current year will be about £2 million, and in 1948–49 we will get the bulk of the full year's yield of £47 million. Therefore, it will begin to operate with considerable effect.
Supposing the higher rates were only made to operate as from 13th November, there would be no yield in 1947–48, there would be only a very small yield in 1948–49, and only a year after that could this increase of the Profits Tax have any appreciable effect to relieve the inflationary pressure. That would be leaving it to a very late stage, and it would be losing a great deal of the advantage which we hope will accrue to the national interest by the imposition of this check on inflationary pressure. It is for that reason we feel we cannot accept this Amendment and postpone the tax in the way suggested.
4.45 p.m.
It was suggested by one hon. Gentleman that companies which had closed their accounts before 13th November


should pay at the old rate, and companies which closed their accounts after, should pay at the new rate from a certain period. I should have thought that it would be unfair on the companies whose accounting periods closed after 13th November. It would be imposing a burden on them which would not be borne by companies that had the good fortune to close their accounts in March or June. Also, it is only from the 1st of the year that the tax begins, so that taking a company whose accounts closed in March, 1947, it is not as if that company has to bear the increased rate for the whole accounting year to March, 1947; it is only for the apportioned period from 1st January, 1947, to the end of March, 1947, or about a quarter of the year. So the burden of retrospection is not as serious as it might otherwise be.
For all those reasons, having regard to the fact that this is an emergency measure and that a great deal of its potency would be lost if we accepted the. Amendment, having regard to the fact that there is ample precedent and also the consideration of recouping revenue which comes to an end with the finish of the Excess Profits Tax, I would ask the Committee to say that we were right in adopting the course we have, and that there is good reason for rejecting this Amendment.

Mr. Assheton: I have listened carefully to what the Solicitor-General has had to say, and I do not feel at all convinced by it. My hon. Friend the Member for Chippenham (Mr. Eccles) and many other hon. Members on this side of the Committee have put forward most cogent reasons against this proposal. I have received a number of representations from accountants, and also from company secretaries and others in my constituency, all of whom feel that not only is this proposal an unfair one, but that it is a bad precedent. The Solicitor-General has told us that there have been precedents for the same kind of thing. It really is no good telling us that something which we think is wrong has been done before, and that therefore

it is right. If there are precedents, they are bad precedents, and the sooner we forget about them, the better.

A large number of companies make up their accounts to 31st March, a great many to 30th June, and some on other dates. All the companies which have made up their accounts, so far as this year is concerned, to 31st March or to 30th June, or since then, would have to reopen those accounts. In every case the profit and loss has been struck, the bonuses have been distributed to the managements, the profits have been divided amongst the shareholders and the dividends have been paid. If there has been an inflationary pressure, it has taken place already. That is in the past. In addition, shares have changed hands on the basis of those accounts and, what is more, amalgamations have been arranged on the basis of those accounts in more cases than one. There are even companies which have gone into liquidation since the beginning of the year, and what it is proposed to do about them, I just do not know.

For all those reasons it is quite clear that it is highly inconvenient that such a proposal as this should have been put forward. It is highly objectionable that retrospective taxation of any sort should be enforced, and although it is said by the hon. and learned Solicitor-General that it will not be any additional trouble to the Inland Revenue, I take leave to challenge that suggestion. We will see in another couple of years whether the Inland Revenue share that view. Of course it is an important point that a considerable amount of revenue will be lost, but the hon. and learned Gentleman pointed out that only a small part of it was in this financial year. Therefore, for all those reasons, I think we have no option on this side but to ask the Committee to divide.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 243; Noes, 135.

Division No. 38.]
AYES.
[4.49 p.m.


Adams, Richard (Balham)
Awbery, S. S.
Barstow, P. G.


Allen, Scholefield (Crewe)
Ayles, W. H.
Barton, C.


Alpass, J H
Ayrton Gould, Mrs. B.
Battley, J, R.


Anderson, F. (Whitehaven)
Bacon, Miss A.
Bechervaise, A. E


Attewell, H. C.
Baird, J.
Berry, H.


Austin, H. Lewis
Balfour, A.
Beswick, F.




Bins, G. H. C.
Henderson, Joseph (Ardwick)
Peart, T. F.


Binns, J.
Herbison, Miss M.
Perrins, W.


Blackburn, A R
Hicks, G.
Poole, Cecil (Lichfield)


Blenkinsop, A.
Hobson, C. R.
Porter, E. (Warrington)


Blyton, W. R.
Holman, P.
Porter, G. (Leeds)


Boardman, H
Holmes, H. E. (Hemsworth)
Price, M. Philips


Bowden, Fig.-Offr. H. W.
House, G.
Pritt, D. N.


Bowles, F. G. (Nuneaton)
Hubbard, T.
Pryde, D. J.


Braddock, T. (Mitcham)
Hudson, J. H. (Ealing, W.)
Randall, H. E


Brook, D. (Halifax)
Hughes, Hector (Aberdeen, N.)
Ranger, J.


Brooks, T. J. (Rothwell)
Hughes, H D. (W'lverh'pton, W.)
Reeves, J.


Bruce, Maj. D. W. T.
Hynd, H. (Hackney, C.)
Reid, T. (Swindon)


Burden, T. W
Hynd, J. B. (Attercliffe)
Richards, R.


Byers, Frank
Irvine, A. J. (Liverpool)
Ridealgh, Mrs. M.


Castle, Mrs. B. A.
Irving, W. J. (Tottenham, N.)
Roberts, Emrys (Merioneth)


Chamberlain, R. A
Janner, B.
Roberts, W (Cumberland, N.)


Champion, A. J.
Jay, D. P. T.
Ross, William (Kilmarnock)


Chater, D.
Jeger, G. (Winchester)
Royle, C


Chetwynd, G. R
Jeger, Dr. S. W (St. Pancras, S.E.)
Scollan, T.


Cluse, W. S
John, W.
Scott-Elliot, W.


Cocks, F. S.
Jones, D. T. (Hartlepools)
Segal, Dr. S.


Collick, P.
Jones, P. Asterley (Hitchin)
Shackleton, E. A. A.


Collins, V. J.
Keenan, W.
Sharp, Granville


Colman, Miss G. M.
Kendall, W. D.
Shurmer, P.


Cooper, Wing-Comdr, G
Kenyon, C.
Silverman, J. (Erdington)


Corlett, Dr. J
Kinley, J.
Simmons, C. J.


Cove, W. G.
Lee, Miss J. (Cannock)
Skeffington-Lodge, T. C.


Cripps, Rt. Hon. Sir S
Leonard, W.
Skinnard, F W.


Daggar, G.
Leslie, J. R.
Smith, C. (Colchester)


Daines, P.
Lever, N. H.
Smith, Ellis (Stoke)


Davies, Clement (Montgomery)
Levy, B. W.
Smith, S. H. (Hull, S.W.)


Davies, Edward (Burslem)
Lewis, J. (Bolton)
Sorensen, R. W.


Davies, Harold (Leek)
Lewis, T. (Southampton)
Soskice, Maj. Sir F.


Davies, R. J. (Westhoughton)
Lipton, Lt.-Col. M.
Stamford, W.


Davies, S. O. (Merthyr)
Longden, F
Stewart, Michael (Fulham, E.)


Deer, G.
Lyne, A. W.
Strachey, Rt. Hon. J.


Delargy, H. J.
McAdam, W.
Stross, Dr. B.


Diamond, J.
McAllister, G.
Summerskill, Dr. Edith


Dobbie, W.
McEntee, V. La T
Sylvester, G. O.


Dodds, N. N.
McGhee, H. G.
Symonds, A. L.


Driberg, T. E. N.
Mack, J. D.
Taylor, H. B. (Mansfield)


Dumpleton, C. W.
McKinlay, A. S.
Taylor, R. J. (Morpeth)


Dye, S.
Maclean, N. (Govan)
Taylor, Dr. S. (Barnet)


Ede, Rt. Hon. J. C.
McLeavy, F.
Thomas, D. E (Abordare)


Edelman, M.
MacMillan, M. K. (Western Isles)
Thomas, Ivor (Keighley)


Edwards, Rt. Hon. Sir C. (Bedwellty)
Macpherson, T. (Ramford)
Thomas, I. O. (Wrekin)


Evans, A. (Islington, W.)
Mainwaring, W. H.
Thomas, John R. (Dover)


Evans, E. (Lowestoft)
Mallalieu, J. P. W.
Thurtle, Ernest


Evans, John (Ogmore)
Mann, Mrs. J.
Tiffany, S.


Evans, S. N. (Wednesbury)
Manning, C. (Camberwell, N.)
Titterington, M. F.


Ewart, R.
Marshall, F. (Brightside)
Tolley, L.


Fairhurst, F.
Mathers, Rt. Hon. G.
Vernon, Maj. W. F


Farthing, W. J.
Medland, H. M.
Walker, G. H.


Fernyhough, E
Mellish, R. J.
Wallace, G. D. (Chislehurst)


Foot, M. M.
Middleton, Mrs L.
Warbey, W. N.


Forman, J. C.
Millington, Wing-Comdr. E R
Watkins, T. E.


Gallacher, W.
Moody, A. S.
Watson, W. M.


Ganley, Mrs. C. S.
Morley, R.
Webb, M. (Bradford, C.)


George, Lady M. Lloyd (Anglesey)
Morris, Lt.-Col. H. (Sheffield, C.)
Wells, P. L. (Faversham)


Gibbins, J
Morris, P. (Swansea, W.)
West, D. G.


Gibson, C. W
Morrison, Rt. Hon H. (Lewisham, E.)
White, C. F. (Derbyshire, W.)


Gilzean, A.
Moyle, A.
White, H. (Derbyshire, N.E.)


Glanville, J. E. (Consett)
Murray, J. D.
Whiteley, Rt. Hon. W.


Granville, E. (Eye)
Naylor, T. E.
Wilkes, L.


Greenwood, Rt. Hon. A. (Wakefield)
Neal, H. (Claycross)
Wilkins, W. A.


Greenwood, A W. J. (Heywood)
Nicholls, H. R. (Stratford)
Willey, O. G. (Cleveland)


Grey, C. F.
Noel-Baker, Capt. F. E. (Brentford)
Williams, D. J. (Neath)


Grierson, E.
Noel-Buxton, Lady
Williams, J. L. (Kelvingrove)


Griffiths, D. (Rother Valley)
Oldfield, W. H.
Williams, W. R. (Heston)


Gunter, R. J.
Oliver, G. H.
Willis, E.


Guy, W. H.
Orbach, M.
Wills, Mrs. E. A.


Haire, John E. (Wycombe)
Paling, Will T. (Dewsbury)
Wise, Major F. J


Hal[...] Rt. Hon. Glenvil
Parker, J.
Woods, G. S


Hannan, W (Maryhill)
Parkin, B. T.



Hardy, E. A.
Paton, Mrs. F. (Rushcliffe)
TELLERS FOR THE AYES:


Harrison, J
Pearson. A.
Mr. Snow and Mr. Popplewell




NOES.


Amory, D. Heathcoat
Baxter, A. B.
Boothby, R


Anderson, Rt. Hn. Sir J. (Scot. Univ.)
Beamish, Maj. T. V. H.
Bower, N.


Assheton, Rt. Hon. R.
Bennett, Sir P.
Braithwaite, Lt.-Comdr. J. G.


Baldwin, A. E.
Birch, Nigel
Bromley-Davenport, Lt.-Col. W.


Barlow, Sir J.
Boles, Lt.-Col D. C. (Wells)
Buchan-Hepburn, P. G. T.







Bullock, Capt. M.
Hutchison, Col. J. R. (Glasgow, C.)
Osborne, C.


Butcher, H W.
Jeffreys, General Sir G.
Peto, Brig. C. H. M.


Carson, E.
Jennings, R.
Pickthorn, K.


Challen, C.
Joynson-Hicks, Hon. L. W.
Pitman, I. J.


Channon, H.
Keeling, E. H.
Ponsonby, Col. C. E


Clifton-Brown, Lt.-Col. G.
Kerr, Sir J. Graham
Raikes, H. V.


Cole, T. L.
Kingsmill, Lt.-Col. W. H
Rayner, Brig. R.


Cooper-Key, E. M.
Lambert, Hon. G.
Reid, Rt. Hon. J. S. C. (Hillhead)


Crookshank, Capt. Rt. Hon. H. F. C
Langford-Holt, J.
Roberts, H. (Handsworth)


Crosthwaite-Eyre, Col. O. E.
Legge-Bourke, Maj. E. A. H.
Roberts, Maj. P. G. (Ecclesall)


Crowder, Capt. John E.
Lloyd, Maj. Guy (Renfrew, E.)
Ropner, Col. L.


Cuthbert, W. N.
Lloyd, Selywn (Wirral)
Ross, Sir R. D. (Londonderry)


Darling, Sir W. Y
Low, A. R. W.
Salter, Rt. Hon. Sir J. A


Digby, S. W.
Lyttelton, Rt. Hon. O
Sanderson, Sir F.


Dodds-Parker, A. D.
MacAndrew, Col. Sir C.
Shephard, S. (Newark)


Dower, Lt.-Col. A. V. G. (Penrith)
Macdonald, Sir P. (I. of Wight)
Smiles, Lt.-Col Sir W.


Drayson, G. B.
Mackeson, Brig. H. R.
Smithers, Sir W.


Drewe, C.
McKie, J. H. (Galloway)
Snadden, W. M.


Duthie, W. S.
Maclay, Hon. J. S.
Spearman, A. C. M.


Eccles, D. M.
MacLeod, J.
Stanley, Rt. Hon. O


Eden, Rt. Hon, A.
Macmillan, Rt. Hon. Harold (B'mley)
Strauss, H G. (English Universities)


Elliot, Rt. Hon. Walter
Macpherson, N. (Dumfries)
Studholme, H G.


Erroll, F. J.
Marlowe, A A H
Sutcliffe, H.


Fletcher, W. (Bury)
Marples, A. E.
Taylor, C. S. (Eastbourne)


Fraser, Sir I. (Lonsdale)
Marsden, Capt. A.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Fyte, Rt. Hon Sir D. P. M
Marshall, D. (Bodmin)
Thorneycroft, G. E. P. (Monmouth)


Galbraith, Cmdr. T. D
Maude, J. C.
Thorp, Lt.-Col. R. A. F.


Gammans, L. D.
Medlicott, F.
Touche, G. C.


Gomme-Duncan, Col. A
Mellor, Sir J
Vane, W M. F.


Grant, Lady
Molson, A. H. E.
Wakefield, Sir W W.


Grimston, R. V.
Moore, Lt.-Col. Sir T.
Ward, Hon. G. R.


Hannon, Sir P (Moseley)
Morris-Jones, Sir H.
Wheatley, Col. M. J. (Dorset, E.)


Harvey, Air-Comdre. A. V.
Morrison, Rt. Hon, W. S. (Cir'nc'star)
White, Sir D. (Fareham)


Haughton, S. G.
Mott-Radclyffe, Maj. C. E.
White, J. B. (Canterbury)


Head, Brig. A. H.
Mullan, Lt. C. H.
Williams, C. (Torquay)


Headlam, Lieut-Col. Rt. Hon. Sir C.
Neill, W. F. (Belfast, N.)
Willoughby de Eresby, Lord


Herbert, Sir A. P.
Nicholson, G.
York, C.


Hollis, M. C.
Nield, B. (Chester)
Young, Sir A. S. L. (Partick)


Howard, Hon. A.
Noble, Comdr. A. H. P.



Hudson, Rt. Hon. R. S. (Southport)
O'Neill, Rt. Hon. Sir H.
TELLERS FOR THE NOES


Hurd, A.
Orr-Ewing, I. L.
Commander Agnew and




Major Conant.


Question put, and agreed to.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

5.0 p.m.

Mr. Assheton: I wish to make only one small point. There is an aspect of this Profits Tax which has not yet been discussed and which I would like the Financial Secretary and the Inland Revenue authorities to consider carefully. It is that this tax has a distinct bearing on the capitalisation of companies for the future. The way the tax is drawn prejudices the issue of preference shares and encourages the issue of debentures and loan capital. I do not wish to enter upon a discussion of that subject, as it would take a long time, but I urge the Financial Secretary and the Inland Revenue authorities to consider the ultimate implications of that aspect, because it will have the result of creating an entirely unnatural capital structure for companies.
On the Clause in general, I would only say that during the Debates in April we on this side of the Committee exposed fully our objection to the Profits Tax. We have put forward a large number of arguments, which we do not think have been answered in the least. During the con-

sideration of this Clause we have objected to two particular points, upon which we have divided the Committee. In view of the circumstances, we do not propose to divide the Committee on the Clause itself.

Sir Arthur Salter: I wish to put one point in connection with this Clause with which I wished to deal yesterday when we were discussing the increase in the tax upon undistributed profits, but I could not develop that argument because of the restricted character of the Amendment which was then before the Committee. There are, in this Clause, great increases in two taxes which are quite recent taxes. We must remember that in addition to the 10 per cent. tax on undistributed profits and the tax of 25 per cent. on distributed profits, there is, in the background, also the ordinary Income Tax and Surtax. If we take these taxes in their cumulative effect—and we are making great additions now to the total—they make a great difference to the kind of calculation which any person who is deciding either upon a new venture or the extension of his enterprise, has to make before he takes his decision.
If private enterprise is to work successfully in the sphere still left to it, it is essential that when those who have the responsibility, acting with their own money and on the best advice they can obtain, come to the conclusion that a proposed course of action has a substantially greater chance of creating wealth than of losing it, the incentive to promote it should be such as to allow and encourage them to take that step. With the cumulative taxation which we now have before us, any person faced with that problem will have to say to himself, "I must remember that, heads I lose all that I lose; tails I gain only a fraction of what I gain." Certainly, it will not be worth his while to take a certain action unless, on the best calculation he can make, there is not only an odds-on chance, but several times as great a chance, of gaining as there is of losing.
If private enterprise is to work under these conditions, it is clear that in the case of a large proportion of the kind of extensions and ventures of enterprise that ought to be undertaken, the ordinary operation of that calculation will be to stop them from being undertaken, and undoubtedly the country's economy will suffer greatly. The Government's declared policy, and their practical policy, is to rely, for the greater part of our economy, upon the operation of private enterprise, and it is in regard to the export trade, to rely almost 100 per cent. on private enterprise. It is, therefore, of the utmost importance not only that incentives should be there, but that incentives should be of such a character as to induce the right decision in the bulk of average cases.
I realise that in present circumstances full effect cannot be given to what would be ideal from that point of view. I concede the case, in relation to our present financial position, for the increase in the tax on distributed profits so as to prevent the inflationary effect of more money being in the hands of shareholders, thus increasing their purchasing power. But there is to be said, about that 25 per cent. tax, that it is obviously the distributed profits which have an inflationary effect, which is a serious one at the moment. There is also to be said for that part of this Clause that in the nature of things the distinction made between distributed and undistributed profits, with a

specially high rate on the distributed profits, is related to a temporary critical situation, and is not likely to remain as a permanent part of our taxation system.
That is not at all the case when we turn to the increased tax on undistributed profits. That kind of tax is something which is not, in the nature of the case, similarly temporary; it might remain. As was argued with great force yesterday by my hon. Friend the Member for Chippenham (Mr. Eccles), that tax does not, in its net result, really give us any prospect of reducing the inflationary forces from which we are now suffering. Therefore, while purely from the point of view from which I have been speaking, both these taxes have some disadvantages, they are overborne in the case of distributed profits but are not overborne in the case of the increase in tax on distributed profits. I suggest to the Government that as soon as possible, and in relation to any changes in taxation which they make as soon as the present critical financial position has changed or eased in any way, they should bear in mind the extreme importance of securing that the private enterprise system, in the sphere in which it will operate, has a chance of working efficiently.

Mr. Benn Levy: The tax on distributed and undistributed profits is a very important weapon for a Chancellor. Perhaps it will become the most important, weapon in the whole financial armoury against inflation. In my view, it is a weapon which is still capable of, and indeed urgently requires, a good deal of refining before it is fully effective. But the criticism I make of it is on diametrically opposite lines to the criticisms which have come from the other side of the Committee. These were advanced yesterday, and have been repeated today by the senior Burgess for Oxford University (Sir A. Salter) on lines which seem to me mutually contradictory.
One argument has been that this Profits Tax is a disincentive. It was argued yesterday on an Amendment that the additional 5 per cent. which we were discussing would, in fact, be a disincentive on retained profits. In other words, the view was that the extra 5 per cent., or indeed the whole pa per cent. tax on retained profits, will work as a disincentive, and that, as a result, companies will


not retain their profits. That argument ignores altogether the fact that the tax on retained profits is balanced by a bigger tax on distributed profits, so that there will still be, on balance, a tendency to retain profits rather than to distribute them.

Sir A. Salter: I think the hon. Member is referring to the argument of my hon. Friend the Member for Chippenham (Mr. Eccles), which was not that the increase in tax on undistributed profits would cause more to be distributed but that it would give companies a strong incentive to try to spend more money than they otherwise would upon current maintenance, or unnecessary painting, etc.

Mr. Levy: I recall that argument, and I recall also the answer, which, as it happens, the senior Burgess himself inadvertently provided. The answer was and is that all expenditure of that kind was subject to very careful regulation in the way of licences, regulations and the rest of it.

Mr. I. J. Pitman: That is just not so. It is so for expenditure on capital account, but the whole point of the hon. Member for Chippenham (Mr. Eccles), and of all of us on this side of the Committee, is that it encourages expenditure on revenue account which expenditure is not subject to any licence whatever.

Mr. Levy: I will willingly answer that point in its turn. But it was made not by other hon. Members opposite, but by the hon. Member for Bath (Mr. Pitman) alone. In my submission, it was the only point of substance made from that side of the Committee. But I was answering first the points made by the hon. Member for Chippenham. As for the hon. Member for Bath, when he says that the effect of this tax would be to increase expenditure on revenue accounts, what he is really saying is that at some point there comes into operation the law of diminishing returns. It was noticeable that when he used an illustration, the only way in which he found it possible to drive it home was to ask the Committee to imagine that the tax was 17s. 6d. in the £ and not 2s. in the £.

Mr. Pitman: I mentioned 17s. 6d. as a reductio ad absurdum. The tax is not 10 per cent.; it is more than 10 per cent. because it is after Income Tax. The total tax is 10s. 1d. and the amount left with

the company is 9s. 11d. In other words, for 9s. 11d. a company can get £1 worth of revenue expenditure.

Mr. Levy: In fact, the extra tax is 1s. in the £. I know that the hon. Gentleman used the phrase reductio ad absurdum, but the significant thing is that it was necessary to make that illustration to drive his argument home. I do not think that anybody would suggest that this extra 5 per cent. tax is of such a magnitude that it will bring into operation the law of diminishing returns. I agree with the hon. Member who said that every step helps, but I submit that this very mild tax certainly does not push the thing over the border. All it amounts to is another 1s. in the £. So much for the arguments on the grounds of disincentive advanced by hon. Members opposite.
But, surprisingly enough, they also complain that this tax is not disinflationary. That argument has been advanced again and again. It follows, therefore, that if they complain that it is not disinflationary, they agree that it should be disinflationary. They agree that disinflation is desirable. If it is desirable, I do not understand how the senior Burgess for Oxford can say that it is also desirable to maintain incentives, because that is a direct contradiction. If we want more money available for the pursuit of capital goods, then we introduce incentives. If we want less money in pursuit of capital goods, then we introduce disincentives. Hon. Members opposite cannot seriously run both those horses at once, complaining in one breath that they want more incentives and in the next breath that they want disinflation. Hon. Gentlemen must make up their minds.

Mr. John Lewis: It is a disincentive not to distribute more profit by way of dividend but rather to put it to reserve.

5.15 p.m.

Mr. Levy: Not necessarily. The important point is that I do not think that hon. Members opposite honestly believe that this tax is not disinflationary. Indeed, the right hon. Gentleman the Member for the City of London (Mr. Assheton) admitted yesterday that he could just conceivably see that it was possible to represent the withdrawal of £23 million from the capital market as a


disinflationary measure. If there is £23 million less available for the purchase of capital goods, that is disinflationary.

Sir A. Salter: I admit that if we increase a tax of this kind, it would have certain aspects which would be disinflationary, but there comes a time at which we must weigh the loss of incentive against the disinflationary effect. My argument was that this was a case where, taking the measure as a whole, the disinflationary effect was very small indeed, and in some cases, negligible, whereas the loss of incentive to other persons was very important.

The Chairman: I am afraid that we cannot have a discussion on the rightness or wrongness of the Profits Tax as a whole. The sole question on this Clause is whether there should be an increase in Profits Tax and not whether there should be a Profits Tax or not. I also hope that we are not going to have a repetition of the Debate which we had yesterday and that hon. Members will bear my remarks in mind.

Mr. Levy: I did not intend to repeat yesterday's Debate. I was going to argue, because it seems to be legitimate on this Clause, that the Profits Tax should be modified in certain forms and respects which I am coming to now. I agree that, partly owing to interruptions, I have been rather a long time in getting to that point, but the point I was trying to establish was that there is a basic difference between us on this matter. I do not dispute for one moment that hon. Members opposite want disinflation, but they do not want it at the expense of profits and capital. We on this side of the Committee also want disinflation, but we do not want it at the expense of food and social services.
There are two rather serious points for consideration. We have at present a differentiation between distributed and non-distributed profits. That differentiation may in fact act as an inflationary influence. If there is a lower rate of taxation on retained profits, for which there is obviously a superficial case, it immediately becomes in the interests of shareholders that trading surpluses should be put into retained profits and not distributed, and that the individual shareholder should derive his profit not in the form of

dividends, but in the form of capital appreciation. That is one of the serious defects which can only be remedied if, concurrently, there were introduced a tax on capital appreciation. But to have this differentiation as it is, is inviting inflation——

The Financial Secretary to the Treasury (Mr. Glenvil Hall): Is not the remedy to step up both taxes as we are doing?

Mr. Levy: No. That is precisely the point which I am making. Unless it is counter-balanced by a tax on capital gains all that it does is to move money from the distributed profits pocket into the retained profits pocket, so that most trading surpluses are put into the latter and they are distributed really in the form of tax-free capital appreciation. It seems to me, therefore, that, although there should be a differentiation, that differentiation should be, not so much between distributed and undistributed profits, but between different trades and services. I think this solution of the difficulty is one which might recommend itself to the right hon. Gentleman the senior Burgess for Oxford University. It is one which has already been urged in the House on more than one occasion in the past by myself and others, and has been developed elsewhere, and I am perfectly persuaded myself that it is going to be, or ought to be, the main line on which we will have to tackle, not only this inflationary problem, but the whole of our economic planning.
I hope that both the Chancellor and the Financial Secretary will look again very seriously at this matter, which has been considered very carefully both by hon. Members here and by economists elsewhere. There are, in fact, no real practical objections against a differentiation between three classifications of industry; unnecessary industries, normal industries and essential industries. There would be no tax on the latter, a tax at a moderate rate, such as exists at present, on the middle group, and a tax of perhaps 75 per cent. on the other, and I very strongly recommend this course to my right hon. and learned Friend for his sympathetic consideration.

Mr. Gallacher: I am sorry that it has not been possible to pass an Amendment to double the tax. I will not go any further than saying that on that aspect of the question. I am very


interested in some of the arguments which have been put forward in connection with various Amendments. It has been argued that this tax, somehow or other, would militate against production. All of us on this side of the Committee are for disinflation, but the very best method of securing disinflation and beating inflation is more and more production. I happen to be a Member of the House who has had the responsibility of talking to shop stewards and workers on this question of working harder and getting greater production. It is to the workers that we have to go for greater production, not the employers or the management, and the one thing that will keep the workers from putting their backs into the job is big profits, and the one thing which the workers are now demanding everywhere is that the Chancellor should cut into the profits of the employer. I know that from experience. I will take any hon. Member on the other side to a meeting of shop stewards—except the right hon. Gentleman the senior Burgess for Oxford University (Sir A. Salter). The Committee can imagine what would be the effect on the workers of a speech of the kind made by the right hon. Gentleman. By the time he finished they would be as muddled as he is himself.
I wish to say, in answer to the right hon. Gentleman the Member for the City of London (Mr. Assheton) that I have not had a letter from an accountant or any of my business associates against this tax, and I have a whole lot of associates who are very definitely interested in the question of production and upon whom depends the fate of this country. Not one of them has sent me a letter protesting against this tax, but I have had any amount of letters suggesting that the tax should be heavier. The right hon. Gentleman sneers at the Financial Secretary for talking about this money fructifying. I can quite understand that, when the right hon. Gentleman was in the Treasury, it did not fructify, but it is different today, and it is fructifying. I remember discussions in the House before the war on the terrible position of the population of this country, but did any hon. Member listen to the radio the other night and hear about the big increase in the birth-rate and the great decrease in the death-rate? Is it not fructifying there through the

influence of the Chancellor of the Exchequer? I suggest that hon. Members opposite should stop this foolish practice of trying to save money with rotten arguments.

The Chairman: On this Clause, the sole question is whether there should be an increase in the tax or not.

Mr. Gallacher: Any increase that is put on will receive the support of the workers of this country, and if it was doubled, it would receive double support. Hon. Members opposite have been moaning and groaning about this tax. I say to the Chancellor, "For heaven's sake, put them out of their pain and make it 100 per cent."

Mr. Harold Roberts: We have listened to a lot of talk from hon. Members opposite in which there has been great use of the word "disinflation." The opposite of inflation is deflation. Hon. Members opposite are so very fond of talking about the evils of deflation that they do not like to use the word now, and therefore use the polite term "disinflation" for the same thing.
I rise to call the attention of the Committee to a point which I think is quite undefined but which is implicit in this Bill, and was, in fact, latent in the earlier Act. To raise the tax to 25 per cent. may be serious, as it seems to me that, in the liquidation of companies, there will be a capital levy of 25 per cent. imposed upon capital assets, and I do not think that is intended. I have read in HANSARD the Debate on 15th July, when the operative Clause was before the House, and I think its purpose was to deal with recently-earned profits which had not had time to fructify in dividends. I understand that the advice given from Somerset House was that, in the liquidation of assets, above 100 per cent. all capital put in was to be regarded as profits, and that will lead to some rather remarkable results. It would apply to capital appreciation and to a reserve fund built up over many years and fully taxed and which may have borne Surtax under the appropriate Statute, but which may now be treated as capital and again be taxed at 25 per cent.

Mr. John R. Thomas: Perhaps the hon. Gentleman will give us some reference to where that directive is


contained, as I am quite sure that many Members of the Committee are quite ignorant of it?

Mr. Roberts: I am afraid the hon. Gentleman and I are at cross purposes. The position is that if a company is not thought to be distributing enough in dividends, it is the practice to make a direction, and to assess the company for Surtax.

Mr. J. Lewis: Only a one-man company.

Mr. Roberts: In point of fact, that interruption is really incorrect. That act is not confined to one-man companies, or anything like it, either in law or in practice. It extends, in law, to all companies, and, in practice, it applies to companies with a very considerable number of members. Profits accumulated over the years, and which may, in fact, have borne not only Income Tax but Surtax, will now be subjected to a levy of 25 per cent. on distribution.

Mr. J. R. Thomas: I asked the hon. Member for the information which he has. In answering my question, he referred to Surtax. I am not concerned with Surtax. He states that there will be a Surtax equal to 25 per cent. on companies going into liquidation. I ask him to give us the regulation, and not the understanding. A Government official cannot impose a tax by an understanding. Will he give us that regulation?

Mr. Roberts: I am afraid that the hon. Gentleman did not pay me the compliment of listening to me with care. What I said—and I will repeat it—was that I understand that Somerset House have directed the Inspectors of Taxes that that is a true construction of the law. I do not suppose the hon. Gentleman will say that they cannot do that. In my view, if they do so, they are correct. It is what the letter of the law says, and I commend it to the Treasury for consideration. Even though it cannot be dealt with now, it is an anomaly which ought to be dealt with, and I think the point should be brought to the attention of the public and of this Committee as soon as possible.

Mr. Charles Williams: I have deliberately taken no part in the Debate on the various Amendments to the Clause. I feel that we, as a Committee, have suffered during the discussion of this

Clause, which proposes an increase of taxation, from the fact that we have been unfortunate enough not to attract very much attention from the Chancellor himself. I am among those who have, from time to time, been attracted by appeals from a Chancellor to produce more, and things of that kind. I agree that, as far as this Clause is concerned, the doubling of the tax on undistributed profits will serve to absorb money which might otherwise be distributed in buying goods, but I do not think it is going to do very much to counter inflation, because the Treasury will no doubt proceed to expend it. However, I have no wish to enter into a complicated argument on that matter.
Many of us are very deeply disappointed at the way in which the Treasury have refused in any way to meet the position as far as undistributed profits put to reserve are concerned. That is a vital matter, and I ask the Financial Secretary to the Treasury to remember that in this case, we are not dealing with some great and wonderful individual, such as the particular Minister who issues many more permits for high priority steel than there is steel available. We are not dealing with that type of brilliant individual, but with ordinary individuals who have built up British trade and brought work to the people of this country.
5.45 P.m.
I propose to emphasise three points in connection with the reason why I think, particularly at the present time, we should allow profits to be put to reserve and to be held for the time being. In many businesses today, as, for instance, in agriculture—and there is no reason why agriculture should not be considered in this connection when it is run on a considerable scale—the people concerned cannot buy new things which they want. They cannot develop or build. Surely, therefore, it is a practical thing for them to buy Government Stock, and wait until the time arrives when they can buy the necessary materials? That is one example of a business putting its income to reserve. That is a wise thing to do, and would help in the long run. There is another example. Very often a business is unable, at the present time, to develop because of the shortage of labour and materials, and because it is not able, by this or that permit, to get and do what is wanted.
I am not quarrelling with any of those facts, but I do say, that being the position with which we are faced at the present time, it is grossly unwise of the Chancellor, after all the appeals he has made for the development of the export trade, to do anything which, although it does not affect exports at the moment, will affect exports over a long period of time. I ask that this relief should be given purely from the point of view that it is absolutely essential not to take the short view of what is wanted at the moment, but to endeavour to enable British business today to lay aside adequate funds so as to be able to take the long-term view with regard to the development of trade and export in the future. I maintain that it is the long view which is essential.
I am disappointed that the Chancellor has not been here very much to help us in this Debate. If he had been, I believe that the whole position of this Clause would have been changed. I have nothing to say about the right hon. Gentleman the Financial Secretary to the Treasury, but I think that even he will admit that his right hon. and learned Friend has a slightly bigger grasp of the matter than he has himself. In those circumstances, I think it is a tragedy to be asked to pass this Clause which can do nothing but hinder the development of trade and industry, and which is a direct discouragement to the better employers in the country to try to build up their industry for the future benefit of both the country and those engaged in industry.

Mr. Glenvil Hall: May I begin by saying how sorry I am that my right hon. and learned Friend the Chancellor of the Exchequer could not be here for this Debate? He desired to be here, and he sent a message to say that he was delayed at another meeting. He means no disrespect to the Committee. On the contrary, he would like to have taken part in these proceedings.
I must, in any reply that I make, stick close to what is in the Clause. Quite a lot that has been said has roamed a little wide of it. This Clause does one simple thing. It doubles the tax which, up to now, has been levied on rates of profit. Many of the points about whether a Profits Tax is right or wrong, or whether it helps or hinders industry, are, in my

submission, quite out of Order in this Debate. [HON. MEMBERS: "No."] Therefore, I will not, except incidentally, touch on some of the points and arguments used—interesting or plausible though some of them were. The main criticism levelled against these proposals of my right hon. and learned Friend is that, in doubling the tax on undistributed profits, he was doing something which he should not have done. If I read the mind of the Committee aright, there was a general feeling that the Profits Tax should be raised. Hon. Members on both sides agreed that it should be raised on distributed profits on the ground that fresh inflationary pressure would be prevented. Hon. Members opposite can see no reason why any increase should be levied on that part of profits which are undistributed, on the single ground that those profits were kept, as it were, in the family, and put in reserve. Therefore, they did no harm, because they could not escape and become purchasing power in the ordinary sense.
Let me remind the Committee that a differentiation between distributed and undistributed profits was originally made in order to help industry. It was felt that at this juncture, after six years of war, when much of the equipment in industry was worn out, something should be done to help the managements to recondition their factories, workshops, and mills. I mention that because it has been implicit in much that has been said that the fact that there was a division does make a difference between the two forms of tax, as taxes. I want to underline, point out, and emphasise that the division was for that single purpose, and, in spite of that division, profits are profits. Therefore, whether distributed or undistributed, they are liable to taxation.

Mr. J. Lewis: Would my right hon. Friend agree that the greater the difference between the distributed and undistributed profits the greater inducement there would be to put profits to reserve?

Mr. Glenvil Hall: I will come to that. At the moment I am making the point that we are dealing here with profits. Therefore, my right hon. and learned Friend has every right, when he is increasing taxation in various directions, to tax profits, as profits. The fact that, in order to help industry, profits have been divided, and a differential rate introduced


is, in one sense, immaterial. All profits at this time in our history should bear some increase of taxation. My hon. Friend the Member for Eton and Slough (Mr. Levy) had some very interesting things to say. He thought this tax should be selective and profits divided into groups. Those from essentials should be, as it were, herded off from those from unessentials, and so on. He could not have thought very deeply about this matter because, in my view, it would be extremely difficult to differentiate between one industry and another in the way he suggested. He also asked my right hon. and learned Friend to consider, between now and next April, a capital gains tax. My right hon. and learned Friend is willing to consider any suggestion, even the one made by the hon. Member for Eton and Slough.
5.45 P.m.
May I say finally that, in doubling this tax, my right hon. and learned Friend has three things in mind and three objects in view. By doubling the tax we double the gap between the rate which is levied on what is distributed and what is not distributed. Where, before, the incentive not to distribute was seven and a half per cent., it is now 15 per cent.

Mr. Oliver Stanley: Would the right hon. Gentleman say what it would be if he did not double the tax on undistributed profits?

Mr. Glenvil Hall: It would, of course, be——

Mr. Stanley: Bigger still.

Mr. Glenvil Hall: It would be bigger still. But I am trying to show that, in doing what has been done, we have struck a fair and proper balance in this matter. In doubling the tax on both types of profits we have doubled the gap between what is distributed and what is not distributed. In that sense, therefore, there is a greater incentive now than there was before to leave profits undistributed and put them to reserve. My right hon. Friend has, moreover, lessened the temptation to spend, on capital goods, at a time when we want to damp down expenditure of that type. Finally, it would be unfair, if we are increasing the taxation on beer, and on the Purchase Tax—and on almost every type of goods—to

leave profits out. The workers, who are today working hard to help the export drive, would feel that this Government had not played fair by the great mass of the people, and both the management and technicians, as well as the workers, might have something to say.

Mr. Gallacher: The workers look upon these profits as open disclosed profits or hidden and crypto-profits. They do not make any difference.

Mr. Glenvil Hall: I know that my hon. Friend the Member for West Fife (Mr. Gallacher), is an authority on anything "crypto." I am not so versed in these matters as he is, but there is no doubt a great deal in what he says. At any rate, I have given the reasons why it has been found proper to increase the tax by the percentages by which it has been increased. I hope that the Committee as a whole will realise that my right hon. and learned Friend has done the right thing.

Sir Frank Sanderson: Although it may be advanced that the argument put forward by the Financial Secretary to the Treasury has made a case, From his point of view, that the Purchase Tax should remain as it does in the Bill, I cannot understand how it comes about that, with his high principles and integrity, the Chancellor of the Exchequer should deem it wise and expedient to make this tax retrospective. I know of no argument which could be advanced in favour of making the tax retrospective, that is, to 1st January, 1947, and I can think of many reasons why it should not be. Has the Chancellor considered the position of those industrial companies which balance their books on 31st March, 31st June or, perhaps, 30th September?

Mr. Ungoed-Thomas: They would have to be very clever to do it on 31st June.

Sir F. Sanderson: I thought I said 30th June. All those accounts are inaccurate.

Mr. J. R. Thomas: Mr. J. R. Thomas rose——

Sir F. Sanderson: I shall not detain the Committee for more than a few minutes. If a firm of accountants knowingly drew up a company's accounts incorrectly, they would be subject to the severest penalties, but due to the incidence


of this tax being retrospective, all the accounts which have been drawn up and audited after 1st January last are incorrect in fact. What is the position of companies which have allocated their profits and made provision for reserves, taxation and dividends and have already paid their dividends out of the profits earned up to 30th June last? Surely, it means that during the present financial year they will be required to make special allocations for increased taxation in order to meet the retrospective portion of this Clause.

Mr. J. R. Thomas: On a point of Order. Is the hon. Gentleman in Order in discussing the retrospective effect of this tax, which, as I understand it, has already been dealt with on an Amendment on which a Division was taken?

The Deputy-Chairman (Sir Robert Young): If it has already been discussed, it cannot be discussed again.

Mr. J. R. Thomas: It has been discussed.

Sir F. Sanderson: It was discussed on an Amendment, but I understand we are now discussing the Question that the Clause stand part of the Bill.

The Deputy-Chairman: I beg the hon. Member's pardon. I thought the Amendment in question referred to another Clause. In fact, it related to this Clause which the Committee is discussing.

Sir F. Sanderson: I shall not detain the Committee long——

The Deputy-Chairman: I hope the hon. Member will not repeat what has already been said on the Amendment.

Sir F. Sanderson: No, Sir. I have no intention of repeating anything which has been said. I hope the Chancellor will give this matter his very serious consideration. I am sure he appreciates that to place a company's accounts in jeopardy and to put a heavy responsibility upon the accountants is a very serious matter.
I want to raise one other point to which reference has not been made. Take the case of a company which is financed primarily by the issuing of debentures and preference shares, and which has a very small nominal amount of ordinary share capital. The debenture holders receive a prior claim of interest.
The preference shareholders have a second claim, and the ordinary shareholders, namely, the equity holders take the balance of profits, subject, of course, to reserves. In a case of that kind it must be obvious that the whole weight of this retrospective Clause will fall upon the equity holder. I could enumerate companies which are in this position. They find that after meeting their debenture interest and preference dividend, they will not have sufficient to pay anything in respect of the ordinary shares, because of the special provision necessary to make in order to meet the charge of the retrospective taxation for the previous year. I ask the Chancellor to consider whether, if he cannot go the whole way, he can at least make the tax operative as from 31st March last. I cannot see how the operation of this tax as from 1st January last can be justified on any grounds, and I ask the Chancellor to consider this matter very seriously between now and the Report stage.

Mr. Jennings: I believe there are only one or two major issues which can be raised on this Clause. My hon. Friend the Member for Chippenham (Mr. Eccles) last night raised what I consider to be a fundamental issue with regard to the part of this Clause which seeks to increase the tax on undistributed profits. I think we are all at one with the Chancellor in his desire to mop up all inflationary money, and we agree that it is right he should do so. On the question of undistributed profits, however, we are getting on to rather dangerous ground. My hon. Friend the Member for Chippenham asked whether this tax would interfere with production. The hon. Member for West Fife (Mr. Gallacher) said that production was only done by the people employed in industry. A very important side of industry is to maintain up-to-date and efficient machinery, and if any burden is placed on companies' reserves, they are unable to buy up-to-date machinery and maintain production.
6.0 p.m.
I am inclined to agree with my hon. Friend the Member for Chippenham that export production may be seriously affected. The Financial Secretary said a little time ago that the difference in the tax on the undistributed profits and on the distributed profits was for the purpose


of allowing industry to get some benefit in order that it could equip itself. I think that the time for that has not been long enough, and that there is still a lot of re-equipment to be done in industry. It is not the right time at the present moment; but if we deplete the reserves by doubling this tax on undistributed profits, obviously we shall affect the reserves of companies.
A great deal has been said about what reserves are for and how companies use them. There are thousands of companies—and I am not speaking of the huge concerns, but small limited companies, small concerns—which put away their earnings and have been in the habit of putting away money, in order to be able to keep themselves up to date. When one considers that a machine that cost, perhaps, £1,000 before the war, the written down value of which may be £250 today, would cost £2,000 today, one sees how necessary are reserves for re-equipment. I am sure that the Chancellor will keep his eye on the deterrent effects this tax will have on export production. I know that he will keep his mind on the effect the tax will have on the ability of firms to buy what they need in the interests of the export trade. I am sure he will give due consideration to that side of the picture.
There is the other side of the picture to which attention was drawn by my hon. Friend the Member for Bath (Mr. Pitman). It is a very important matter. If this tax is doubled on undistributed profits we shall have rather a temptation to make as much expenditure on the revenue side as concerns can possibly carry out. The hon. Member opposite may laugh, but there is a good deal to be done in industry.

Mr. J. R. Thomas: I certainly did laugh, because the hon. Member must know full well that companies are not allowed to put any sort of expenditure in their revenue accounts. Revenue accounts are subject to inspection by tax inspectors. They will be watched.

Mr. Jennings: The hon. Member and I happen to belong to the same profession, and I hope that he prepares his accounts in the same way as I do. I charge to profit and loss accounts only perfectly legitimate renewals. I am not alluding to any other expenditure outside that scope. So I hope that the hon.

Member will grant that I am right in my argument that there is a lot of expenditure that cannot be undertaken today but which is, nevertheless, needed to be undertaken. People may seek an opportunity to increase expenditure on revenue accounts. These are very important matters. It must not be forgotten that if we deplete reserves—and the Clause is only the thin edge of the wedge—by this tax on undistributed profits, we shall deplete the strength of companies which they will sorely need in order to maintain employment and to equip themselves in the future. It is a short-sighted policy, in my opinion, to strip a company of its reserves. These concerns are not, as has been suggested, all badly balanced, badly run companies. They are like the family company of which my hon. Friend the Member for Lonsdale (Sir I. Fraser) spoke yesterday that had been going for 150 years and had built up reserves in order to be able to maintain their trade. This tax on undistributed profits is a backward step.
The hon. Member for Blackley (Mr. Diamond) said that Socialism was the very foundation of the development of efficiency for the benefit of industry. If that is Socialism, and if that is what it stands for, one of the worst things we can do is to starve companies of reserves and make them unable to equip themselves when the time comes for re-equipment, and to render them unable to maintain their position in the industrial world. The immediate anxiety is the export trade, and I ask the Chancellor to keep his eye clearly on that matter. I am sure he will do so.

Major Peter Roberts: I want to put one point to the Chancellor. I have the advantage of knowing that the Financial Secretary to the Treasury and the learned Solicitor-General were on the Committee which dealt with this point. It is the question of how this 25 per cent. distributed profits tax is going to affect the interim income paid under the Coal Industry Nationalisation Act. This is a very important point. It deals, as the Financial Secretary knows, and, I do not doubt, as the Chancellor also knows, with a great deal of money which was allotted for valuation under that Act. It seems that a very unfair thing has happened—that this interim income, which was allotted on the basis of a cut of 50


per cent., is going to attract this tax also.
Let me remind the Committee of the basis on which this arises. The interim income was to be paid to the holders of colliery shares on behalf of their valuation units. It was considered by the Government, who took over the collieries, that it would take at least two years for the valuation to take place; and, therefore, they said they would give some interim income over the two years. However, in finding out what that income was they cut, by half, the standard income for one year; or, in other words, a 50 per cent. tax was levied upon that income. This devise was used to assist the Government in getting through their valuation proceedings.
The then Chancellor, when he brought this point up on the Second Reading of the Coal Industry Nationalisation Act, made it clear that in assessing this interim income he was taking into account all the facts with regard to the stopping of the trading of the companies. He said, in other words, that the proper income was 100 per cent. in a datum year, but that he was going to cut that down by half and give only 50 per cent. of that income over these years for various reasons. One was that there was not any risk; the companies had ceased to trade. Another very interesting reason was that the companies had no need to put any money to reserves of any kind, and would pay the whole amount straight through their accounts to the shareholders. This money which has to be—it most likely will have to be—paid to the shareholders, has already been docked 50 per cent., and is now to attract another 25 per cent. tax.
I am raising this point at this stage in order to get some idea of what the mind of the Government is on it. I appreciate that, without proper warning, it is impossible for them to answer it now, but by the time we reach the Report stage, I hope it will be possible to bring this matter forward again and for the Government to answer it fully. I want to ask the Financial Secretary if he can assist me at this stage by telling us what the Government's reactions are now to this matter, because there is going to be great hardship to the stockholders who are relying on this interim income which is to be cut another 25 per cent. If the Government can give some information now it will assist the discussion we may have on the Report stage.

Mr. J. Pitman: I think there is a double justification for our speaking on this Clause. We have a new Chancellor with a keen and a fresh mind, and, therefore, we are right in calling attention to what we consider to be a bad tax because, not only may he act on it now, but there is the further possibility that he will think between now and the next Budget of what is the right way of taxing profits. Hon. Members opposite must get it into their heads that we on this side of the Committee do not object at all to a tax on profits at this time. It is the way in which it is done that we consider inequitable. It is inequitable in two ways—in degree and in incidence.
First, let me deal with the inequality of degree. Is the Chancellor really aware of the fact that the Profits Tax paid by a company depends, not on the quantity of its profits but on the capital structure which it happens to have? If it has a capital structure which consists solely of ordinary or other shares, then it will pay a very considerable Profits Tax. But if its capital structure is largely debentures——

The Deputy-Chairman: I do not know if I follow the argument of the hon. Member correctly, but I think he is going outside the limits of undistributed profits.

Mr. Pitman: This is not a Clause on undistributed profits at all. This deals with a Profits Tax. It is doubling the Profits Tax; it is on both; and the essence of my remarks is that this is a particularly inequitable manner of taxing profits, by doubling the Profits Tax. It is a bad double. The betting tax may be a good double, but this is a bad double, and I am arguing that it is inequitable in degree because it depends, not on the amount of profit that a company makes, but on how the company happens to have its capital structure set up. If there are a lot of debentures, or if it borrows money from the bank on overdraft, or if it has notes and quite a small capital structure—it may be only £100—then all it pays on its Profits Tax at the higher rate on distributed profits is very small because the capital is very small—and the lower rate on its undistributed profits. That seems to me to be a grave inequality in this tax.
This tax is also unequal in its incidence. We on this side feel that if debenture holders are to get a large slice


out of the profits, then they, too, ought to pay their share to the nation at the present time. But this tax falls solely on one class, of capital, and that is on what the hon. Member for Chippenham (Mr. Eccles) called "venture" capital. I call it entrepreneur capital. The Chancellor—in many ways quite rightly—gave us a lecture on the partners in industry the other day, when he mentioned labour, management and capital. He really ought to have said labour management, loan capital and entrepreneur capital. The incidence of this tax is particularly inequitable in that it falls solely on the entrepreneur capital. Whether the entrepreneur capitalist is a man who had the enterprise to launch it, or whether it is the man to whom that capital is later assigned, it ought still to be regarded as "entrepreneur" rather than "sleeping partner" capital. If whenever the entrepreneur sells his shares for the price which he considers right, it is then to be regarded as non-entrepreneur capital and treated accordingly, he will find great difficulty in realising the fruits of his enterprise. Surely, there is a much better way of taxing profits. If Income Tax were raised, it would fall on debenture holders and note holders, on the banks if they are lending at interest, or whatever it is, and on ordinary capital. What is needed, however, is a bigger discrimination in favour of earned income and a bigger discrimination in favour of undistributed profits.
The hon. Member for Eton and Slough (Mr. Levy) was very unfair to me in saying that I quoted 17s. 6d. and 2s. 6d. because my case was not made unless I did so. The trouble is that 9s. 11d. and 10s. 1d., which are the real figures, are rather harder to put over than round sums. But even getting £1 worth of revenue expenditure for only 9s. 11d., one has already entered the field of inflationary pressure. For that reason, as well as for the other two reasons—that is to say, because this tax is inequitable in degree and in incidence—it is inflationary in that particular sense. I have consistently made it clear that I regard this tax as on balance deflationary; but everybody can produce cases where the whole £47 million, for instance, might be left in cash at the bank, in which case it would be deflationary. I agree that, on balance, it is deflationary, but the effect of the high

rate of taxation on undistributed profits goes a long way and unnecessarily to cancel out the deflationary value, because by itself it is inflationary.

Clause ordered to stand part of the Bill.

CLAUSE 8.—(Interest on unpaid Income Tax, Profits Tax and Excess Profits Tax.)

6.15 p.m.

Major Haughton: I beg to move, in page 5, line 16, to leave out from "date," to the end of line, and to insert:
when the assessment or direction becomes final and conclusive.
This Clause deals with the provision for the application of interest at the rate of 3 per cent. on unpaid Income Tax, Profits Tax and Excess Profits Tax. There are a great many people who think that these Income Tax matters are complex, very difficult to understand and highly technical. I hope and believe that this Amendment can be explained simply. It seeks to limit the claim of the Crown for interest to the date when the appeal is determined, as opposed to the wording of Subsection (1), which says:
 … when the tax becomes due and payable until payment.
There are many appeals, and it seems reasonable that interest should apply only when a final settlement has been reached, and after the appeal has been threshed out to a conclusion. I have been long enough a Member of this Committee to realise that it is very dangerous to prophesy on matters which one regards as principles, but when it comes to a question of fair play, I hope the Chancellor will see his way to making this concession.
I do not need to labour the point. We all know that there are different dates on which the different forms of tax fall due. Put briefly, where there is a dispute, at present the interest would be applied to the tax, but the Crown can claim interest on unpaid arrears, whereas the taxpayer cannot claim interest on overpayments. That indicates that the dice are weighted very heavily in favour of the Treasury.

Sir P. Bennett: I wish to support what my hon. and gallant Friend the Member for Antrim (Major Haughton) has said. It is clear that some misunderstanding has been created in the minds of many


people on this question of arrears of Income Tax. The business world feels very sore about it, and we hope that this Amendment will help to clear up the position. The previous Chancellor of the Exchequer made great play with the fact that in the good old days a mere £700 million was outstanding, whereas today there is some £700 million. It was not fair to suggest that the business world has suddenly become immoral, and has deliberately kept this money which ought to be paid into the Exchequer. It is also an insult to the Inland Revenue to suggest they have been so slack that they have allowed the outstanding contributions to multiply ten-fold without doing anything about it.
That is not the case at all. The position is totally different. Settlements have not been made because of the difficulties due to shortage of staff in the Inland Revenue and shortage of staff among accountants. The money has not been left outstanding, because many millions of pounds have been paid in under the system of tax reserve certificates. The taxation authorities have deliberately left settlements, knowing that the money was there, because it was more convenient to do so, owing to the difficulties connected with Excess Profits repayments, deferred repairs, and the whole complicated machinery arising out of wartime finance.
We are entitled to ask the Chancellor of the Exchequer to make it clear that the business world has not been doing wrong, and some statement of the net amount overdue, after outstanding settlements have been made and the whole thing has been cleared up, should be made. We should know what is outstanding after the tax reserve certificates have been deducted. The misapprehension created in the minds of the public should be removed. We feel that an injustice has been done to us, and I have enough Irish blood in my veins to make me boil when I think I am suffering under an injustice. When I first came to this House, the Government were being harassed because they were not paying their accounts. Time after time, Questions were put and statements made on behalf of companies who could not get their money out of the Government. We did not then say that the Government were keeping the industrialists waiting out of pure cussedness. We knew that the war had created difficulties, and that

when the system was working properly, the payments would be brought up to date.

Mr. Glenvil Hall: I think we can clear up this matter fairly simply, and without too much trouble or delay. I agree with the hon. Member for Edgbaston (Sir P. Bennett) that the facts should be made public, because they reflect no discredit on the Inland Revenue or on those who have anything to do with the collection of these taxes. The reports of the Public Accounts Committee and of the Comptroller and Auditor-General make it quite clear that the figures given are not the net but the gross figures of the actual tax due. A great deal of that money, as was made clear, was money which might or might not be due, because some assessments were open to query, and some were subject to an appeal, which might easily be successful.

Mr. Stanley: Can the right hon. Gentleman give the correct figures of the amount of money due and in arrears?

Mr. Glenvil Hall: So far as I have them, they are the figures which appear in the reports. The gross figure given for Income Tax, Surtax, National Defence Contributions and Excess Profits Tax is something like £780 million. That, of course, is staggering, and that is the figure which people have concentrated upon, because they thought that it was the total amount outstanding. Actually, as is made clear to those who have read the reports, the Excess Profits Tax arrears which were then collectable amounted to only £107 million, which puts an entirely different complexion on the matter.

Mr. Pitman: Were there not capital reserve certificates to cover much of that amount?

Mr. Glenvil Hall: If I had known that this was to be raised, I would have given the details.

Mr. Stanley: Will the right hon. Gentleman give the figures on Third Reading?

Mr. Glenvil Hall: Yes.

Sir F. Sanderson: Can the right hon. Gentleman go so far as to say that the amount of tax reserve certificates is in excess of the amount of tax outstanding?

Mr. Glenvil Hall: I would not like to commit myself, because I have not the


figures with me, but I agree that the figure was fairly substantial.

Sir P. Bennett: Will the right hon. Gentleman give the figures on Third Reading so that publicity can be given to the correct figures?

Mr. Glenvil Hall: I will take what steps I can. It may be out of Order to do that on Third Reading, but we will do what we can to call the attention of the public to the actual figures.
I will now come to the Amendment. As I understand it, the Amendment seeks to take out the words "due and payable" and to insert the words "final and conclusive." The effect is that the date at which interest on unpaid tax becomes chargeable would be that at which the assessment of tax becomes final and conclusive. I believe that hon. Members opposite are labouring under a misapprehension. This is how it works. A notice of assessment is issued, and the individual then has a right of appeal. Normally, he must appeal within 21 days, and if he does not appeal, the tax is fixed and becomes due and payable, but not necessarily at that time. The amount is fixed at that moment, but it is due and payable on certain later dates. In the case of Schedule D, these dates are in the following year. A man might receive an assessment in October of this year, and after the 21 days have elapsed, the assessment becomes final in November, 1947.
If this Amendment were accepted, the interest would begin to run three months after that date, providing that the amount was over 3,000, whereas the due and payable date is not until 1st January, and, if there are two instalments, not until 1st January and 1st July. Hon. Members opposite are therefore doing a disservice by this Amendment to those who become subject to this provision when it becomes law. We are proposing something very different, which we think is more reasonable; it certainly helps the individual concerned more than this Amendment. Therefore, we ask the Committee to reject the Amendment. I can give the assurance that if an appeal is lodged, the time will not begin to run until that appeal has been settled and agreement has been reached between the Inland Revenue authorities and the individual concerned.

Mr. Stanley: I was a little disturbed until the right hon. Gentleman got to his

final sentence. It was not until then that he gave us exactly what we were trying to obtain, perhaps wrongly, by this Amendment. We were not sure, and it certainly has not been said clearly before that this only ran from the time when final agreement had been reached between the Inland, Revenue and the taxpayer. Now we have the right hon. Gentleman's assurance that this is so, it would seem that the point raised in the Amendment has been covered.

6.30 p.m.

Mr. Joynson-Hicks: I agree with what my right hon. Friend has just said, but I would impress upon the Financial Secretary that his interpretation of "due and payable" might not necessarily be the interpretation which the Inland Revenue or the law courts would put upon those words. I believe that the Solicitor-General would support me in this, and I ask the Government to look at these words again to make certain that their intention is carried out in such a way that it cannot be challenged by the courts.

Major Haughton: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Major Haughton: I beg to move, in page 5, line 24, to leave out "unless."
This Amendment is related to the later Amendment on line 27, to insert:
(c) if the taxpayer holds tax reserve certificates issued under a date prior to the date on which the tax became due and payable to an amount equal to the amount of the tax.
The point of the Amendment is this: money is paid into the Treasury, and it seems unfair that when the Treasury holds money against an amount which may become due in taxation, interest should become payable over the period during which that assessment is subject to an appeal. The Crown already has the money by reason of the purchase of these tax certificates.

The Solicitor-General: The answer given by my right hon. Friend the Financial Secretary also covers this point. Either the matter is under appeal, in which case no interest runs, or it has been finally decided, in which case the tax reserve certificates can be surrendered in payment. Therefore, no question of interest will arise.

Mr. Stanley: I agree that this point is covered by the statement which the right hon. Gentleman made earlier, but I take this opportunity of repeating the fears expressed on this side of the Committee. We hope that the Solicitor-General will take the opportunity, between now and the Report stage, of making certain that the legal import of these words is the same as the wholly satisfactory statement made by the Financial Secretary.

Major Haughton: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. W. Fletcher: I beg to move, in page 5, line 26, to leave out "one thousand," and to insert "three hundred."
There is no doubt that where cases occur of non-payment of tax due, it is a severe crime against the State. That non-payment may be either deliberate or due to carelessness, and in each of those cases it is right that the parties should be brought into the open and pressure put on for payment. I cannot see why an arbitrary line should be drawn at the £1,000 level. The lower income groups are already well protected, but between £300 and £1,000 there must lie a large number of businesses which are not so small, and which are making between £1,000 and £2,000 per annum. Those businesses, for their own protection, should come into this category. There is no doubt that it is helpful to them that they should be more or less compelled, under penalty, to carry on their business in such a way that their accounts are well kept, that they are ready to pay tax after it has been settled and where it is due. The protection of small businesses is a matter to which we on this side of the Committee pay a good deal of attention, and it is for their protection that they should be included in this category. If it is wrong that there should be undue tax delays, either intentionally or through carelessness, the Chancellor, if he has devoted his attention to this question, should lower the figure. Incidentally, by doing so he might get a little more money.
We have heard many times the statement that new taxation should not harm those in the lower income groups, such as workers in industry. These workers are fully protected in this Amendment, but I beg the Chancellor to see whether the

line has not been drawn in such a way as to give the impression that it is only people above that line who commit these offences. It is difficult to get accurate figures, but we can see the amount coming in above the £1,000 mark and between £300 and £1,000. I cannot vouch for the accuracy of the figures, but it would appear that the amount between £300 and £1,000 is fully equal to, if not rather more than, the total amount above that line. I hope the Government are thinking of this matter on reciprocal lines. There are many people who have claims against the Government, and who have not been able, for many reasons, to get them settled in good time. Are they to be treated in the same way? Do the Government intend to impose upon themselves the same strictures and penalties as they do on firms and individuals? The Government protect themselves occasionally by a moratorium, or something similar, and claims which have been outstanding for five or six years should have full consideration.

Mr. Joynson-Hicks: I rise to support the Amendment, and to ask the hon. and learned Gentleman a question. The point I wish to make applies whether the amount is £1,000 or £300. It is by no means difficult to visualise a case in which a series of assessments has been made over a period of years. Assessments may have been made on a sum of £200 over five years, making a total of £1,000, dating back to 1940. Will the hon. and learned Gentleman tell me whether that complete series of assessments, totalling in all over £1,000 and being over three months in arrears from the date when they became due and payable, will become liable to interest, and if so, whether the whole £1,000 will become liable to interest? If they are paid off severally, as is generally the case, when the total falls below £1,000 will the balance cease to be liable for interest?

The Solicitor-General: If the hon. Member for Chichester (Mr. Joynson-Hicks) will look at the wording of the Clause, he will find the answer that he seeks. Before making any charge for interest, one has to have an individual assessment under which assessment a sum of over £1,000 is made payable. If the amount due is not paid within the specified time of three months, interest begins to run. With regard to the arguments adduced


by the hon. Member for Bury (Mr. W. Fletcher), we have been obliged by purely practical considerations to adopt a limit—a margin—below which we will not seek to impose interest. The reason we have been obliged to adopt a margin is that with the present shortage of staff the Inland Revenue Department cannot undertake all the extra work which would be involved if interest were sought to be levied on smaller sums. We have selected the figure of £1,000, having carefully estimated the sort of work which that would entail. The hon. Gentleman's Amendment suggests that we should substitute the figure of £300. The result of that would be, so far as we can estimate—it is difficult to do so with any degree of accuracy—100,000 extra cases; that is to say, the number of cases within the charge would be increased by 100,000 if we substituted the figure of £300 for £1,000.

Mr. W. Fletcher: I have made a considerable study of this with chartered accountants. The final notice has to be sent out in any case to these taxpayers, and so the added work would in reality be quite small. It needs only a notice on the final note that is sent out.

The Solicitor-General: The sending out of notices is not the only matter entailed. The amount has to be computed and collected. We have to compute and collect in all these extra cases the amount of interest, which may in individual cases be quite small, which would be involved by the extra number of cases brought within the sphere of the charge. We have appreciated the position, and having estimated what is within the limits of capacity of the present staff of the Inland Revenue Department, we have come to the conclusion that it would be quite impossible to undertake this extra work. It would mean that the work would fall seriously into arrears, and members of the Department would be hopelessly overburdened. Therefore, although I see the object behind the Amendment, I feel that I must ask the Committee to reject it because it would lead to an impasse.

Colonel Gomme-Duncan: Is not a question of principle involved? If interest is to be charged on £1,000 and upwards, and presuming that is justifiable, surely it is right

that justice should not be subjugated to administrative convenience. I cannot see why one lot of persons should be let off and not another lot. If a fellow is not paying Income Tax on £250, he is just as guilty as the man who is not paying on £1,000.

The Solicitor-General: This is not only a question of administrative convenience. To put this extra work on the shoulders of the Inland Revenue Department simply cannot be done.

Colonel Gomme-Duncan: Then the other chap should be let off, too.

The Solicitor-General: Urgent national necessity requires that there should be a charge of interest imposed in some cases. Bearing in mind all sorts of considerations that have been advanced, we have tried to find a reasonable limit beyond which we cannot go. We think that we can manage the imposition of this interest with a limit of £1,000, but we do not think that we can go further than that.

Mr. Stanley: I can only say that the Solicitor-General's answer, although it may be justified on the grounds of administrative convenience, goes a long way towards reducing the whole of this Clause to a farce. This was put to us in the original stages of the Budget as a matter of great importance. It was not so much the money that was to be collected as a result of this Clause, but the speeding-up that was to result. From that time on, every speech which has been made from the benches opposite has whittled down the importance of these arrears. The original figure of £700 million has been brought down. I overheard the hon. and learned Gentleman ask whether it had been stated in the Chancellor's speech that £700 million was the figure. I do not think that he recollects the statement that the Chancellor made last April on the same subject, when he made no such qualification as he made in November.
I have had the privilege perhaps of listening more to the ex-Chancellor on financial matters than the hon. and learned Gentleman has. Today that figure has been brought down to at least £100 million. We are told that with research into the amount of Tax Reserve Certificates available, the amount


of arrears will fall still further. Now we are told that the amount of the arrears represented by no fewer than 100,000 individuals is not to be touched by this Clause. We are left wondering how much this Clause can accomplish. I have no desire to favour in any way those whose liability for tax has been established and who are, therefore, liable for payments, but I wonder whether the great hammer of this Clause is not going to be applied to crack very small nuts, remembering, of course, that nuts today, under the administration of the Minister of Food, have a value which they never had before.

Amendment negatived.

Mr. Selwyn Lloyd: I beg to move, in page 5, line 27, to leave out "one," and to insert "five."
I can put the argument in favour of the Amendment very shortly, because it follows directly on what has just been said. It never occurred to me, when studying this Clause, that administrative convenience could possibly have anything to do with its drafting in view of the complications to which we will come later on. No one could have thought that administrative inconvenience was the theme note of this Clause. My simple Amendment is solely in aid of administrative convenience to increase the total of interest owing from £1 to £5. What is the use of expending the time of valuably employed officials and an overburdened Department on collecting sums of interest which may be between £1 and £5? Would it not be very much better to fix the limit at £5? Really, everything that the Solicitor-General said on the last Amendment is in support of my Amendment.

The Solicitor-General: I can answer the hon. and learned Gentleman quite shortly on that. The £1 he knows is a de minimis provision and we feel that if we increase it to£5 the Clause would not afford sufficient spur. After all, if one looks at the figures and takes an imaginary set of circumstances, one gets this picture. Suppose a taxpayer owes over £1,000, it would be well worth his while to leave £500 unpaid for as much as four months, because by so doing that £500 would attract interest of not more than £5. If that were possible the requisite inducement to payment would not be forthcoming. Therefore we

feel that the figure must be placed lower than that. However, if it were placed lower than £1 a great deal of time would be spent in collecting minute sums. We think that £1 is the right, fair and sufficient limit, and, therefore, we ask the Committee to reject the Amendment.

Amendment negatived.

Major Haughton: I beg to move, in page 6, line 2, to leave out from "direction," to the end of the line.
In moving two previous Amendments, I said that they could be explained quite simply and that there was no need to elaborate them a great deal, but in this case it would be a very great stretch of the imagination to say that the application of this Clause is likely to arise in any simple case of taxation. On the contrary, it arises in cases of great complexity and the litigation is spread over a number of years and concerns a number of accounts. Certainly it concerns Income Tax as well as Excess Profits Tax, and the Income Tax people may be withholding a final settlement until the Excess Profits Tax appeal has been settled.
Be that as it may, my Amendment is really based on two broad principles, the first being that where an appeal is spread over a number of years and where there are likely to be pluses and minuses, they shall be taken into account and there shall be a single final assessment. Otherwise, there could be the fantastic position of an overpayment of tax by the taxpayer at the end of the whale investigation, and yet there could have been a claim for interest by the Crown because in one year there was an underpayment. Leading on from that general principle, it is accepted that the Inland Revenue is one indivisible debtor to the taxpayer. My Amendment, to put it as simply as I can, seeks to ensure that when an appeal is at an end, whatever interest there may be shall be taken into account and that the various forms of taxation—Income Tax and Excess Profits Tax and also any minuses and pluses—shall be applied to the net amount.

The Solicitor-General: As I listened to the arguments of the hon. and gallant Member for Antrim (Major Haughton), I felt he was supporting the Amendment which follows this one rather than that to Clause 8, page 6, line 2. If hon. Members will look at the present Amendment, they


will see it is one which seeks to exclude the limitation to a single year in relation to this interest on repayment charges. The argument which the hon. and gallant Gentleman has adduced makes out a case for excluding the limitations referred to in the next Amendment, which would leave out lines 14 to 31, that is, a limitation to single taxes. I think I am right in saying that his arguments are really relevant to both Amendments, and can be taken entirely in the light of the same considerations. Therefore, I propose to address my remarks on this Amendment to cover both cases.
We feel apprehensive as to what the consequences might be of doing away with the two limitations—the limit to a single year and the limit to a single tax. We have in mind the sort of situation that might arise if there was, for example, an interest charge on Schedule D tax for 1948, and, say, in 1953 repayment of Income Tax was made in respect of Income Tax charges made in 1952. Supposing that set of circumstances did arise, if the Amendments are accepted and if there is no limitation, then the taxpayer could say, in respect of the interest which he paid as long ago as 1948, that he should have some repayment of interest because four or five or even more years afterwards he was found to be entitled to repayment in respect of a subsequent period. What we feel is that that would lead to an enormous amount of confusion, and, instead of getting some sort of finality, the taxpayer would never know where he stood with regard to the matter. That is one consideration that presses on us about this.
At a later stage I shall give the Committee an assurance which I hope will satisfy hon. Members opposite, and particularly the hon. and gallant Member for Antrim. Meanwhile, may I urge this situation. If one is trying to equate the position between the taxpayer and the Crown, and one says "If you charge interest on the taxpayer you should equally charge interest against the Crown and you should have a general setting-off on the basis of equality," then one is, in effect, saying that the Crown should pay interest, once the final amount of tax settled is agreed upon, if the Crown does not make payment of the amount at the end and any delay occurs.
But once the amount is agreed upon the Crown would make payment almost immediately, so that that particular consideration would not have practical import as far as the Crown is concerned. If, however, we are saying that, no matter what interval of time may have elapsed between the date when the tax becomes due and the date when the repayment becomes due, the taxpayer shall be entitled to set off against his interest on the tax the amount due to him and an equivalent amount of interest upon the repayment, then hon. Members are proposing to charge interest against the Crown by virtue of the fact that there has been a delay by the taxpayer to claim his repayment. That is really what one would have. That is a position which I do not think the Committee would regard as equitable.

7.0 p.m.

Major Haughton: That does not necessarily arise. The hon. and learned Gentleman presupposes that those Acts deliberately deal with repayment of taxation, but in cases of appeal the grounds for appeal may be perfectly reasonable. All that my Amendment seeks to do is to say that the plusses and minuses shall be taken into account, and that the different forms of taxation shall also be taken into account, in the final amount of the settlement.

The Solicitor-General: I entirely understand the suggestion of the hon. and gallant Gentleman, and I appreciate the point. I venture to offer a practical solution of the problem which has been advanced. While an assessment is under appeal, no interest charge accrues. But the situation might arise that an amount can be owed by way of Income Tax in circumstances in which interest begins to accrue, while there was a claim to repayment with regard to some other form of tax, for example, Profits Tax. The taxpayer may go to the Revenue authorities and say: "You owe me so much." The Revenue authorities may, in those circumstances, say: "Having regard to the fact that repayment has been claimed, the taxpayer may defer payment of the amount which he owes by way of Income Tax." That is the sort of situation which may arise, and it is a practical situation which requires to be met.
That being so, I would offer this undertaking to the Committee, which I think meets the arguments advanced by the hon. and gallant Gentleman. I say this, and I phrase it carefully and deliberately: If some tax has been assessed and is due and payable to the Crown, and collection of the tax or part of the tax is, by agreement with the Inland Revenue, held over pending settlement of a claim to repayment of tax to which the taxpayer may be entitled, the amount held over for the period for which it is agreed to be held over can be treated for the interest charge as though the amount had been provisionally repaid and credited against the tax due and payable. In other words, if it has been agreed between the taxpayer and the Revenue authorities that the taxpayer has a claim and that he may therefore defer payment of some other form of tax, which payment he owes, then, if it is subsequently found that he is entitled to the repayment, it shall be treated as if it had been paid, with the result that to that extent interest on the other payment will not accrue.
I suggest that that is a practical and reasonable way of dealing with the points which have been made. I would ask the hon. and gallant Gentleman, upon the undertaking which I have given and have carefully phrased, to withdraw his Amendment. I would point out, by way of supplementation what I have said, that it operates not only as between years, so as to bridge the gap between years, but also as between taxes. Supposing there was one sort of tax which was due and there was a claim to repayment in respect of a different sort of tax, that would come within the scope of the undertaking. That is an undertaking which I can give as to the form of this Clause. I think it would be permissible to treat that as a provisional repayment.

Mr. Stanley: The hon. and learned Gentleman is an expert in these matters, and certainly the assurance given to my hon. and gallant Friend seems satisfactory, but when I was listening I found some difficulty in seeing how the hon. and learned Gentleman could give that assurance in view of the very express terms of the Clause in lines 14 to 31. Those words would appear expressly to forbid the very thing——

The Solicitor-General: Perhaps the right hon. Gentleman will allow me to add something. I will add this, that I will make certain that the undertaking can be implemented. I will look at the wording of the Clause and see that it does so.

Mr. Stanley: Of course, the easy way to make it certain would be by accepting the Amendment to leave out line 14 to 31.

The Solicitor-General: I will look into the matter.

Mr. Stanley: On the understanding that the hon. and learned Gentleman will look into this point between now and the Report stage, and will make certain that he can carry out his undertaking, perhaps my hon. and gallant Friend will withdraw his Amendment.

Major Haughton: I appreciate very much the way in which the point in my Amendment has been met by the Solicitor-General, and, therefore, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Selwyn Lloyd: I beg to move, in page 6, line 37, to leave out from
"section," to "shall," in line 38.
The purpose of the Amendment is to provide that anyone who has to pay interest shall be able to charge that interest against his profit and loss account. Why should not such interest payments be treated as charges against profits? If the taxpayer goes to the bank to borrow money to discharge his tax liabilities he has to pay interest on his overdraft. He can then charge that interest against his profit and loss account. If it is not convenient or profitable for him to go to the bank or to borrow the money in some way, the Inland Revenue may decide to give him time to pay. In those circumstances, why should not the interest which he will have to pay under the Clause be chargeable against his profit and loss account?
Is it the idea that this interest provision should be a penalty or a fine? That would be a most unfair attitude to take up. In a time of trade recession or if a business suffers some temporary disaster, it may be impossible for the taxpayer to meet his tax liabilities promptly. That happens in hundreds of cases. The Revenue in such cases is usually extremely reasonable about settling terms of payment. Under the Clause, those arrangements would


carry with them an interest charge. If they do, why should not the taxpayer be entitled to treat them as he would the interest paid to his banker or to someone else?
The right hon. and learned Gentleman is not supposed to be a great gambler. That can be readily understood because in this case he seems to be saying, "Heads, I win, tails you lose." If we look at the situation under war damage claims where the Government is the embarrassed debtor asking for time to pay, and pays interest upon the amount outstanding, the Government is careful to deduct Income Tax from the interest payment. That may not be an exact analogy but it is not very far wide of the mark.

Mr. Pitman: One point not brought out by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) is that this proposal is discriminatory. I am not using that word in a derogatory sense. The proposal is 6 per cent. or rather more than 6 per cent. when a company is making a profit. If it is not making a profit, the interest drops to 3 per cent. That is the reverse of what usually happens in the commercial world, where the greater the risk, the greater is the rate of interest. Companies who have made profit in the past and who are not making a profit now are just those who are likely to give trouble to the Chancellor over their payments. It seems bad to demand from one type of company twice the rate which is demanded from another type of company.

The Solicitor-General: There is a precedent for this in the old Excess Profits Duty of the 1914–18 war in which there was provision for the payment of interest at, I think, 4½ per cent. which was not allowed to rank as a deduction against Income Tax. The same could be said, I rather think, with regard to the interest on Death Duties. In this case, however, I do not rely upon precedent but upon the object of the Clause, which is to induce payment of arrears. If this interest charge were allowed to rank as a deduction, the inducement would practically disappear.
The interest charged is £3 on £100. The Amendment proposes first that that should rank as a deduction for purposes of Profits Tax, so that in any particular

sum of £3 we should first have to deduct 6s. It is then said that it should rank as a deduction for the purposes of Income Tax, so that makes a further deduction of £1 4s. 4d. Therefore, if it ranks for deduction for those two taxes we have to deduct from £3 the sum of those two figures, namely, £1 10s. 4d. Persons liable to Profits Tax and Income Tax would therefore only be paying interest at the net rate £1 9s. 8d. If a person paid Surtax and this ranked as a further deduction against Surtax, the net rate would be still further reduced according to the scale of Surtax paid.
We feel that to impose an interest charge on a non Surtax payer at the rate of £1 9s. 8d. per £100 is not a sufficient stimulus to him to pay up arrears. We must have a rate of interest which will be sufficient to afford a real spur and incentive to him to get the arrears cleared up or the Clause will not achieve its object. For those reasons we feel that this 3 per cent, interest should not be allowable as a deduction for the purpose of either of the two taxes.

Sir John Barlow: To follow to its logical conclusion the point made by the hon. Member for Bath (Mr. Pitman) and the reply to it by the Solicitor-General, on companies making a profit the real rate of interest would be something like 6 per cent. and the real rate of interest on the highest Surtax payers would be 120 per cent. If it is all allowed, as the Solicitor-General pointed out, it becomes a very small actual charge, but if it is charged in a way it is proposed in Clause 6, it becomes an extremely heavy tax in the case of the higher Surtax payers, possibly higher than was originally intended.

Amendment negatived.

Mr. Selwyn Lloyd: I beg to move, in page 6, line 40, to leave out from "payable," to end of Subsection.

Amendment negatived.

7.15 p.m.

Mr. Selwyn Lloyd: I beg to move, in page 7, line 1, to leave out Subsection (7).
I ask the Solicitor-General to undertake to have another look at this Subsection, which provides that a collector's certificate shall be sufficient evidence of the amount due by way of interest and also of nonpayment. No one would object to a collector's certificate being evidence of


non-payment, but as to its being treated as evidence of the amount due by way of interest, I suggest that something has gone wrong somewhere. I admit that in the wording of the Subsection there is a saving proviso that if the contrary is proved then the certificate shall be overridden, but the position of the collector is that he is not a judicial or even a quasi-judicial person like the assessing Commissioners or, in some circumstances, an inspector. The computations of interest due may be complicated and controversial. As is apparent from the discussion on previous Amendments, we may have various counterbalancing factors. Is the collector the right man to give the certificate as to the amount of interest that is due?
According to the earlier part of this Clause, the Crown can go into any court to recover the interest, basing their case on the certificate. Presumably, the taxpayer will then have to open up the matter in front of the county court or high court judge. The elaborate procedure of the commissioners for dealing with appeals and arriving at the proper liability would be bypassed by going to a county court on a collector's certificate. In many cases the collector is not the person who really knows. He does not carry on his business or occupation in the same building even as the inspector, and he is simply a sort of post-office or a banker with regard to the actual handling of the money. I do not think it needs elaborating very much because all I ask the Chancellor to do is to reconsider the matter and decide whether he has got the certificate of the right person and whether he should in some way bring the Commissioners into this matter. If he were to do that he would remove certain apprehensions which have been aroused by these provisions. I am certain that he will agree with me that it is unsatisfactory as a general principle to allow this principle of subordinate officials certifying as to the amount of the taxpayer's liability.

The Solicitor-General: I will certainly consider very carefully what the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) has said and see whether any change is necessary in consequence of the arguments he has used, but I do not think any change is required. He may be under a slight misapprehension. The interest charge has first to be assessed in the ordinary way and only when it has been assessed and charged to the taxpayer does the question of court proceedings to enforce it arise. In other words, the figure has to be computed and notice has to be given saying that that is the figure assessed by way of interest on the tax-

payer. If the taxpayer does not then pay what is requisite, there must he some form of process to compel him to pay in the courts in the ordinary way.
Paragraph 7 (5) of Part I of the Tenth Schedule to the Finance Act, 1942, already contains a very similar provision—I do not say it is an identical provision—with regard to Income Tax. It contains the provision that a certificate of the surveyor—I quite follow the definition given by the hon. and learned Member for Wirral—together with a certificate of the collector that the tax has not been paid and that the amount mentioned in the certificate is due, shall be prima facie evidence that that sum is actually due from the taxpayer from whom it is sought to be recovered. We are seeking to adapt that procedure to what is after all a much smaller payment, simply an interest payment. The hon. and learned Member for Wirral will agree that it would be quite impossible to have a case like that formally proved affirmatively in each single instance. All this does is to. say that when a collector—who is defined in the Subsection as a person authorised by the Commissioners of Inland Revenue to act as a collector of taxes—comes to the court armed with that certificate it is prima facie evidence, and only prima facie evidence, that the amount is due.
If the taxpayer disputes it, it has to be proved formally, and established contrary to such evidence as the taxpayer can adduce in the ordinary way of proceedings in court. All this certificate will be used for is where the taxpayer does not dispute the amount due. This simply provides for formal proof, which proof can be displaced by anything the taxpayer himself advances on his own behalf, and if he disputes it the matter must be properly proved at trial.

Mr. Selwyn Lloyd: Do I understand that the hon. and learned Gentleman envisages that the certificate shall include particulars of the assessment, by whom it was made, when it was made, and in respect of what it was made? If that were to be the practice, I think it would meet my point. Otherwise, the collector would be under no obligation to say any


thing in the certificate except that so much interest was payable under the Finance Act.

The Solicitor-General: I do not know if the precise form of the certificate has been worked out, but I apprehend that it would contain the ordinary particulars showing when it became due. I cannot commit myself as to the form, but I apprehend that in the ordinary way it would contain the usual particulars.

Mr. Selwyn Lloyd: If the hon. and learned Gentleman will undertake to consider this question between now and the Report stage, I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Major Haughton: I beg to move, in page 7, line 12, at the end to add:
 (8) The Commissioners of Inland Revenue may withdraw any claim in respect of interest on proof by the person by whom the tax is payable that non-payment of the tax or delay in payment of the tax was due to delays in computing the tax which were beyond the control of that person.
In these days, when, as we all know, there is great congestion of work in the Inland Revenue, it seems reasonable that there should be some discretion and, this Amendment merely seeks to suggest that discretion shall be vested in the Commissioners to waive interest in cases where the taxpayer can show that he could not prevent the arrears arising.

The Solicitor-General: I think the answer to the case made by the hon. and gallant Gentleman is that, beyond doubt, in the circumstances he envisages, no interest would be chargeable. No interest arises unless there has been a final assessment, or, as to any part of an assessment which is being disputed, until the appeal is disposed of. In those circumstances, I think the hon. and gallant Gentleman will agree that his Amendment would serve no purpose.

Mr. Pitman: I am not sure that the hon. and learned Gentleman is entirely correct. Supposing a well-intentioned taxpayer had actually sent a cheque in payment for the tax due, and that cheque happened to be in the mailbag which interested somebody, and was extracted. There could then have been a non-payment of tax due, over which the person concerned would have no control.

The Solicitor-General: The Amendment simply deals with delays in computing the tax, and would not cover the point raised by the hon. Member for Bath (Mr. Pitman).

Major Haughton: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Howard: If the principle contained in this Clause is correct, why is it limited to Schedule D?

Mr. Glenvil Hall: The short answer is that under Schedule E arrears hardly arise because tax is deducted at the time when wages are paid. Schedule A is a different thing altogether, and the amounts chargeable are very much less. It is under Schedule D that the largest arrears occur, and that is why it has been confined to Schedule D.

Colonel Gomme-Duncan: I may be wrong, but I do not think I am, in feeling that in this Clause we are up against a flagrant injustice. If I am wrong, I hope the Solicitor-General will tell me so. I cannot see that a man who owes a lot of Income Tax is any less or more guilty than a man who owes a little. He should be treated on exactly the same footing. If it is a question of convenience, the matter should be dealt with so that neither party suffers. I think we are going to put on to the Statute Book something which is flagrantly unjust, and I would like to be assured that I am wrong.

Clause ordered to stand part of the Bill.

CLAUSE 9.—(Advertising expenses.)

The Chancellor of the Exchequer (Sir Stafford Cripps): It might be convenient to the Committee if I were allowed to make a statement before Amendments to this Clause are moved.

Mr. Stanley: It would obviously be convenient if the right hon. and learned Gentleman made a statement, but, on the other hand, it may be that hon. Members may wish to discuss the statement. Would


it not, therefore, be better to put the matter in Order by moving to report Progress and then making the statement?

Sir S. Cripps: I was under the impression that if hon. Members wished to debate the statement, that could take place on the Motion that the Clause stand part of the Bill.

Captain Grookshank: Captain Grookshank (Gainsborough) indicated dissent.

Sir S. Cripps: I beg to move, "That the Chairman do report Progress and ask leave to sit again."
When the Second Reading of the Finance Bill took place, I stated that it was my desire, if possible, to avoid imposing any difficulties upon industry or commerce at this already very difficult time and that if some voluntary method could be devised of achieving the same end which I have in view, that of economising in materials and effort in advertising, I would be very glad to consider it and, if necessary, to substitute it for the provisions of the Bill. Since that time, I have had the advantage of a large number of discussions with a number of people who are very expert in this matter, and a fairly full correspondence with a good many people who are, or consider themselves to be, experts in this matter. As a result of these conversations, I have had a communication from the Federation of British Industries, which I would like to read to the House, in which they say:
We have already acquainted you with the very strong objections we feel to the advertising provisions in the present Finance Bill. We were very pleased to notice your remarks in the House, when you offered to consider any voluntary scheme which might be put to you.
I have now been charged by a group, which together covers all the interests concerned, to give you an undertaking that, if the provisions now incorporated in the Bill are withdrawn, the Federation of British Industries will take the lead in setting up a Working Committee to work out methods of achieving the results you wish by voluntary means, as soon as practicable. The organisations concerned, are the following: Association of British Chambers of Commerce, The National Union of Manufacturers, The Advertising Association, The Incorporated Society of British Advertisers, The Institute of Incorporated Practitioners in Advertising, The Newspaper Society, The Newspaper Proprietors' Association, The Periodical Trade Press &amp; Weekly Newspaper Proprietors' Association, The British Poster Advertising Association.
I am sure you will not fail to be impressed, as I have been myself, by the unanimity that

exists in favour of the voluntary method. It is not possible for a scheme involving so many complexities to be worked out in time to anticipate the Committee, or even the Report Stage, of the present Bill, but I have no hesitation in assuring you that the encouragement you would give to the work of the proposed Working Committee by the withdrawal now of the provisions would go a very long way to assuring the successful outcome to that work.

(Signed)

FREDERICK BAIN:"

7.30 p.m.

Under those circumstances, I am quite prepared to try that voluntary method and to withdraw this Clause, and I hope very much that there will be success in these efforts that are being made. We shall have another opportunity of considering this matter in April next to see what progress we have been able to make.

Mr. Stanley: I am sure the whole Committee——

Mr. Gallacher: The right hon. Gentleman can speak for himself.

Mr. Stanley: I am sure all of us on this side, and perhaps those on the other side of the Committee who are not geographically situated with the hon. Member for West Fife (Mr. Gallacher), will congratulate the Chancellor of the Exchequer on the decision he has taken. We thank him for the infanticide which has been carried out so painlessly and with so much decision. Of course, the right hon. and learned Member had the advantage that it was not his own infant. It was just laid on his doorstep, and it is only fair to him to say that since he assumed office he has never omitted to show his aversion to this unwanted pledge of someone else's affection. [HON. MEMBERS: "No."] Well, it may be somebody else's dislike. When he withdrew it, I was reminded of the old epitaph in the church on an infant who suffered demise at just about the same age as this proposal:
If so soon I was to be done for,
I wonder what I was begun for.
With all our gratitude at the end of this proposal, we are entitled to ask, why was it ever begun?

Mr. Ellis Smith: Why has it been dropped?

Mr. Stanley: The hon. Member can ask that question. I will ask mine. I want


to know why it was ever begun because, immediately this proposal was made, the inequality, the unfairness and the impracticability of it emerged more and more strongly. In all the chorus of criticism of the Clause, I only heard one still, small voice raised in its defence, and that was the voice of the Financial Secretary to the Treasury who, on the Second Reading of the Finance Bill, made a gallant effort. The right hon. Gentleman has very high political courage. He has the particularly British type of courage, the type of courage which has brought to our armies some of their most glorious disasters. His not to reason why—he just had to read out the Treasury brief, if not with conviction, at least with concentration. However, I must confess that when the right hon. Gentleman brought out his culminating argument, which was that this Clause might mean less wood for hoardings, and that might contribute to solving the problem of shortage of timber, I felt that defeat was very imminent.
Now we are glad that this Chancellor has turned to the voluntary method to try to correct some evil which he sees, but we regret that that method was not adopted by the previous Chancellor. If as a result of some over-expenditure on advertising there was wasteful expenditure of men or material, and if thereby our inflationary position was more difficult, there seems to be no reason why such an appeal as is now being made by this Chancellor could not have been made months ago by his predecessor. The only result has been that, for the last three or four weeks, great sections of industry have been disturbed and distressed, and much time has been spent on deputations and correspondence, all of which might have been avoided by taking some weeks ago, the step which the Chancellor has announced tonight. I am sure he is right to trust industry to provide him in this instance with the savings he thinks essential. All of us will wish success to the committee which is being set up, and we trust that, as a result of their efforts, anything which can be done in this line to assist us in our economic crisis will be done.
One final word to the right hon. and learned Gentleman. This is a first step in reversing the proposals of his predecessor. I hope it will not be the last, and

that what is on this occasion a courageous precedent will end by becoming a comfortable habit.

Mr. Gallacher: I would have supported the Amendment in regard to such things as art exhibitions and entertainment, but I cannot see why there should be any hesitation about excluding from expenses advertising carried on by big business in this country. It is unbelievable from my point of view. The advertisements which are seen all over the place are simply a means of inducing people to set money chasing goods in short supply, and for bringing in profit to big business. I cannot see why that should not be subject to taxation.
However, I do not want to go into that in detail; I want to raise an important point in connection with this matter. What would have been the attitude on the part of hon. Members opposite if there had been some tax directed against the working class and the Chancellor had come to the House of Commons and said, "As a result of representations from the Trades Union Congress, I have decided to drop this tax"? There would have been accusations from the other side of outside interference, outside influence. Yet this gang of robbers, the Federation of British Industries—[Laughter.] Hon. Members may laugh but I was in this movement 45 years ago and at street corner after street corner, at conference after conference, we demonstrated to the workers that they were robbed and exploited by the capitalists of this country. Then there came into existence this central body that represented all the worst and most vicious power of capitalism directed against the working class, the Federation of British Industries. Now we are confronted in the House of Commons with a statement that the Federation of British Industries, who represent the enemies of the working class of this country, have written a letter——

The Temporary Chairman (Mr. Diamond): The discussion is getting much too wide. We are at present discussing a Motion to report Progress. There will be the opportunity for those who wish to speak on the Clause to do so when the Question is put, "That the Clause stand part of the Bill."

Mr. Gallacher: I do not want to come into conflict with you, Mr. Diamond, but register my strong protest against the


action proposed about a tax of this kind. I would welcome a message or proposal from the Trades Union Congress, which is part of the great working class movement, an ally, I but I protest strongly that these advertisements which are part of the machinery of big business should be included as expenses because of something in the nature of a request, or dictation from the Federation of British Industries.

Sir S. Cripps: Before withdrawing this Motion, I would like to make one or two observations on the unhelpful speech which was made by the right hon. Member for West Bristol (Mr. Stanley). He will appreciate that under the stress of speeches of that kind, I shall not be prepared to make accommodating offers to the House of Commons. Let me first point out to him that the responsibility for a Budget lies in the Cabinet and not in individuals, and that I have just as much responsibility for the putting forward of this taxation proposal as my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), and I was in agreement with it. The position that arose on the proposal was that certain hon. Members—I think the hon. Member for Bath (Mr. Pitman) was one of them—suggested in the course of the Debate that the aim which I had in mind, and expressed, could be more easily attained by a voluntary method.
There were undoubtedly very difficult matters involved in the implementation of this taxation, so that if the aim could be achieved more easily by voluntary effort it was to everyone's benefit, including the Administration, to arrive at the result that way. After that, a deputation, which included Members from both sides of the House, came to see me and asked me to withdraw the proposal for one on some other basis. Subsequently, due largely to the activities of the hon. Member for Bath, the Federation of British Industries collected together this group of people, and gave the undertaking which I have read to the Committee. If the right hon. Gentleman asks why the proposal was introduced, I venture to suggest that this undertaking and this offer would never have been produced had it not been for this Clause in the Finance Bill. It will be an entirely satisfactory solution so far as I am concerned, if the undertaking is duly carried out, as I am sure it will be. If it is not, we shall have plenty of time to review the circum-

stances. I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

7.45 P.m.

The Temporary Chairman: I take it that the right hon. Member for West Bristol (Mr. Stanley) does not wish to move his Amendment, in page 7, line 13, to leave out Subsection (1).

Mr. Stanley: No.

Mr. Emrys Roberts: There is an Amendment in my name and the name of hon. Friends of mine, to leave out Clause 9. Would it not be the correct procedure for that to be called?

The Temporary Chairman: No.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Pitman: I, too, am very grateful to the Chancellor of the Exchequer, and I would emphasise that my right hon. Friend the Member for West Bristol (Mr. Stanley) began by warmly thanking him for deciding on the withdrawal of this Clause. I want to thank him particularly warmly for the ample way in which he met the suggestion, which I made in an interview, that we should reach this objective by an agreed approach, a voluntary method. I thank the right hon. and learned Gentleman for the open mind with which he approached the matter. I also believe that this action has been very statesmanlike. I am in a position to speak with knowledge of the genuineness of the offer which has been made to the right hon. and learned Gentleman to seek voluntary methods of reaching the objective. As he has told the Committee, the Federation of British Industries were responsible for bringing together that wide range of national organisations covering all the interests involved. As he said, a working committee is to be set up on their initiative. I have been asked to act as chairman of this Committee, and I have agreed to do so. It is on those grounds——

Mr. Gallacher: All arranged beforehand.

Mr. Pitman: —and on grounds upon which the hon. Member for Blackley (Mr. Diamond) could assure you, Mr. Diamond, from his own observations in delegations, that I can assure the Committee of the genuine nature of the offer


that has been made. It is my opinion that with this goodwill all round there is every likelihood of a successful outcome.

Mr. Butcher: I would like to join with those who have added their thanks to those of the right hon. Member for West Bristol (Mr. Stanley) to the Chancellor for the wise and statesmanlike action he has taken in withdrawing this tax on advertising. I had a feeling during the Chancellor's observations that he had rather lost his sense of humour. That was doubtless due to the heavy pressure of work which further Business which is on the Order Paper tonight will go some way to alleviate and ease. The more this tax was considered the more thoroughly unworkable it was found. I could have wished the Chancellor, in making his wise and statesmanlike statement of his intention to withdraw the Clause, had stressed some of the practical difficulties with which he found himself confronted in all the advice which he received from accountants, advertising consultants, Income Tax experts, business men, and, I do not doubt, from his own experts at the Treasury. We are grateful to him for his wise and statesmanlike statement, and I hope it will do him no harm with his party.

Mr. McAllister: I should like to join in thanking my right hon. and learned Friend for what I think is an extremely wise decision. I will not go into what "our movement" is, but it is certainly not represented by the hon. Member for West Fife (Mr. Gallacher).

Mr. Gallacher: The hon. Member is interested in advertising. Why does he not declare it?

Mr. McAllister: I very properly declared my interest in the Second Reading Debate on the Finance Bill. I have always taken a great deal of interest in taxation as it affects the arts, even before I became a Member of this House, and I took part in the fight to have the Purchase Tax removed from books when that proposal was made by the late Sir Kingsley Wood. There was a universal feeling that a tax on books was an unjust tax, and he withdrew his proposal. In the same way, a similar issue is involved here, and if the hon. Member for West Fife will look at

the case from other than a purely ideological point of view, he will see that this tax, as proposed, would have affected the book industry. I imagine that even the Communist Party is interested in books, and every book advertisement would have been subject to tax. Similarly, the entertainment industry already pays, on the whole of the box office proceeds, 40 per cent. to the Exchequer in the form of Entertainments Duty. To have added this tax would indeed have been a very grievous additional burden. It is a matter for all-party congratulations to the Chancellor that he has come to this decision.

Mr. Emrys Roberts: I wish to add a word of praise to the Chancellor for his statesmanship and wisdom in taking this action. It pleases us on these benches very much. We had an Amendment on the Order Paper to leave out the whole of the Clause. We thought that we could not tinker with it and that the only thing to do was to leave it out altogether. Although we are suspicious when the Chancellor makes a deal with the Federation of British Industries, in this case we hope that it will have good results. I would like to make the point that it is desirable that the objects of a Clause of this description should be stated more specifically. The former Chancellor of the Exchequer said that the object was to save labour and materials, but it was quite clear when the Finance Bill was published that, so far as newspapers were concerned, that object was not secured in any way. Newspapers are already cut and any arrangement of this nature would merely result in money being switched from advertisements in the newspapers, where it does no harm, to the printing industry, where it might do a lot of harm.
I would like to say a word in protection of the smaller interests who may not be represented in the Federation of British Industries. A Clause of this description might easily do great harm to local weekly newspapers. In Wales our main newspapers are weekly newspapers. They form a large part of our culture and help to maintain our language. Already they have suffered severe difficulties from high costs and cuts in newsprint, and the loss of advertising revenue would be a very serious blow to them. I hope those considerations will be kept in mind when the control of advertising is inquired into.

Mr. Edgar Granville: During the last two days the Chancellor has shown an accommodating spirit. This is not the first concession which he has made. I thought that the right hon. Gentleman the Member for West Bristol (Mr. Stanley) was a little ungracious in the manner in which he accepted this concession. The right hon. and learned Gentleman was pressed by hon. Members on both sides of the Committee. When he tries to meet opinion in a spirit of united effort, I think he ought to be encouraged. I accept this concession in the spirit in which it was given.
I was sorry to hear the hon. Member for West Fife (Mr. Gallacher) refer to this as a concession to the F.B.I. and big business. This would not have hit big business. Big business could have carried this tax either as a trading expense or otherwise. This would have hit the little man, the small enterprise man with new ideas. It would have hit the man producing something which he was trying to sell against the big combines and businesses which may have had a product advertised and established over 20 or 30 years. For that reason, I reinforce what my hon. Friend the Member for Merioneth (Mr. Emrys Roberts) has said. I hope that by this the interests of the little men with small businesses will be safeguarded. We know that they are not represented in the Federation of British Industries, but we hope that their interests will be protected.

Question, "That the Clause stand part of the Bill," put, and negatived.

Clause 10 ordered to stand part of the Bill.

Schedules agreed to.

Bill reported, with an Amendment; as amended to be considered upon Monday next.

MINISTERS OF THE CROWN (TREASURY SECRETARIES) BILL

Order for Second Reading read.

7.57 P.m.

The Chancellor of the Exchequer (Sir Stafford Cripps): I beg to move, "That the Bill be now read a Second time."
I ask the House to deal with the whole of the proceedings upon this Bill today as it is one which we are anxious to get through quickly. It is very short in form. I will come to the actual form of

it in a moment. The object and purpose of this Measure is to enable the Government to appoint an Economic Secretary cial Secretary. There are, in fact, already two Secretaries to the Treasury, one of whom, as the House knows, is Patronage Secretary. Now that fresh work has come to the Treasury, which formerly I was doing as Minister for Economic Affairs, it is essential that there should be another junior Minister to assist in the work. The idea is that we should appoint an Economic Secretary for that purpose.
The right hon. Gentleman the Member for West Bristol (Mr. Stanley) asked me yesterday if I would take this opportunity to explain what is the position of the Paymaster-General who has been, or had been, assisting me in my capacity as Minister for Economic Affairs. As the House well knows, our present economic situation makes it imperative that we should develop both the sale of our goods in hard currency markets and our sources of supply from soft currency countries and especially, of course, from the rest of the sterling area. It is also imperative that we should develop new sources of supply from our Colonies. That three-fold task affects the responsibilities of my right hon. Friends the Colonial Secretary and the President of the Board of Trade, as well as myself.
We have, therefore, asked my hon. Friend the Paymaster-General to undertake special work for us in this field, which makes it impossible for him to take on the duties of Economic Secretary of the Treasury. Besides assisting us in the co-ordination of the plans of expansion and development, he will, from time to time, visit overseas countries. We contemplate, for example, that he may visit South America before long, and, later, the British Colonies in Africa. We are in constant consultation with other British Commonwealth Governments on these matters, and we hope that visits to their countries may also be arranged. My hon. Friend will have at his disposal advice from the Board of Trade and Colonial Office, as well as the Treasury, and the services of other Departments, such as the Commonwealth Relations Office and the Ministries of Food and Supply. It is for the reason that he has to take this very essential work that he is unable to take up the task which he was formerly performing for me when I was Minister for Economic Affairs.
The House will know that the salaries of Ministerial offices are governed generally by the provisions of the Ministers of the Crown Act, 1937, which limits the number of junior Ministers in the Treasury to two, and lays down their salaries, the amounts being £3,000 for the Parliamentary Secretary to the Treasury and £2,000 for the Financial Secretary. The first sub-paragraph of Clause r of the Bill amends the principal Act so as to provide specifically for the payment to the holder of the new post of a salary similar to that of the Financial Secretary. The second subparagraph raises to three the existing limit of two junior Ministers in the Treasury, and the final sub-paragraph brings about a necessary extension, to cover the new post, of the definition given in the principal Act of the generic term of Parliamentary Under-Secretary, which is there Used to designate junior Ministers who, in fact, hold a number of special titles in their own Departments.
It may, perhaps, at first sight, appear that, in spite of its long Title, which covers both salary and ability to sit in this House, this Bill is wholly concerned with the salary aspect. The disqualification for membership of this House which might otherwise be involved in acceptance of the new office is, of course, removed, by bringing the post within the scope of the principal Act. Section 9 of that Act exempts from disqualification all persons to whom a salary is payable under that Act. The benefit of that provision will, therefore, extend to the new office if we bring the holder of the new post under the 1937 Act and provide for his salary to be paid under it. I hope that explains the purpose of the Bill, and that we shall be able to get a rapid Second Reading.

8.4 p.m.

Mr. Oliver Stanley: We object neither to the matter of this Bill nor to the manner in which it has been presented. We recognise that it is particularly urgent, but I am sure that the representatives of the Government will admit that it is most unusual for a Bill creating a new Ministerial post to be rushed through, as it is hoped this will be, in the course of the same Sitting, and we hope that this will not be treated, by them or their successors, as a precedent in this matter.
We on these benches feel that in a matter of this kind we cannot refuse to the right hon. and learned Gentleman what he considers necessary for undertaking the very heavy responsibilities which he now bears. We have pressed for a considerable time for some closer link between the economic and the financial sides of our crisis policy. We are glad that that dichotomy has been resolved. It does impose a very heavy extra burden on the right hon. and learned Gentleman, who is now carrying on not only his previous important work, but the work of the Treasury as well. It is quite clear that, in the Treasury, he will need more assistance then even his very loyal colleague the Financial Secretary is able to give him. The only doubt I have is whether this was not exactly the kind of work which the Paymaster-General had been doing for the right hon. and learned Gentleman in his previous office, and whether it would not be possible either for him to continue, or, if he were to be the man chosen for this work, to allow the Paymaster-General to revert to the unsalaried sinecure which he very often has.
The right hon. and learned Gentleman has given us some details of the work, and particularly the work abroad, which the Paymaster-General will be called upon to do, and I see that that does make it impossible, certainly at present, for him to undertake this task. I do, however, ask the right hon. and learned Gentleman—I do not quite know when the occasion for it would be—if the House could be given in greater detail the exact division between the rather numerous Ministers who will now be engaged in what is rather a common field, because, of course, the duties which the right hon. and learned Gentleman said are going to be undertaken by the Paymaster-General would seem to fall very much within the sphere of activities usually allocated to the Secretary to the Department of Overseas Trade. If we could have something to set out exactly how the functions are being performed by all these various Ministers in this particular situation, it would be of great assistance to hon. Members. So far as I and my hon. Friends are concerned, we feel that, if the right hon. and learned Gentleman, with his responsibilities and his authority, tells the House that, in these grave days, he needs this extra assistance, that assistance should not be refused to him. We shall,


therefore, support the Second Reading of this Bill.

8.9 p.m.

Mr. Boothby: I do not intend to detain the House for more than a few minutes, but I am very interested in this question of the machinery of Government. I think this Bill is another step in the right direction. I think it has been forced upon the Government by the pressure of events, and I myself regret that the Prime Minister has not given more attention than he has done in the last two years to the whole problem of the machinery of Government, which is becoming still more urgent as problems, particularly economic problems, press upon us with ever greater insistence and complexity.
The Government, it seems to me, are being compelled by the relentless pressure of events to deal piecemeal with the problem of the machinery of Government, but one thing which we can all welcome is the end of the period of dual control over our economic affairs. We may regret the reason for its coming, but I could never see how we could possibly carry on with a Minister for Economic Affairs and a Chancellor of the Exchequer, both sitting in the Cabinet and both wielding wide powers, and possibly disagreeing—inevitably disagreeing from time to time—on various vital aspects of our economic policy. It has always seemed to me, and it still seems to me now, odd that we should have one man directing the economic policy of this country in addition to the Chancellor of the Exchequer, because the Treasury is looked upon as the summit and centre of political power in this country, and the Chancellor must govern the economic policy of the country. To have one Minister deciding financial policy and another Minister deciding economic policy, possibly; against each other, seemed to me to be absolute nonsense.
Let us look at the position which we shall be reaching when we pass this Bill. We find the right hon. and learned Gentleman with eight Under-Secretaries—the Economic Secretary, an office which is just being set up, the Financial Secretary, the President of the Board of Trade, the Minister of Food, the Minister of Supply, the Minister of Fuel and Power, the Minister of Transport, and the Secretary for Overseas Trade. The

Paymaster-General is a sort of kitchen maid to the party.
I have always wondered—and I think this is an important and relevant point on the Measure which we are considering—what decides the Prime Minister to make some of these particular Ministers Cabinet Ministers, and others not. I have never understood, for example, why the Minister of Food should be out of the Cabinet and the Minister of Agriculture, who deals only with English agriculture, should be in. It seems to make complete nonsense. Now that the right hon. and learned Gentleman has these eight Under-Secretaries, all of whom will have to do what he tells them—I do not complain about that; I think it is a good thing that somebody is going to tell somebody else what to do, and we can legitimately hope that is going to happen—I would like him to consider the status of those Under-Secretaries and to decide which of them is to be in the Cabinet and which of them he does not wish to see too often, and so put our whole administrative machine on a more logical and rational basis than it has been on in the recent past.

8.12 p.m.

Mr. Lipson: I welcome this Bill for the reasons which have been given and also for the fact that it indicates that the Government have an open mind, so far as additional Ministers are concerned, when circumstances justify such appointments. I welcome it all the more because last week, when the Prime Minister was asked by my hon. Friend the Member for Bodmin (Mr. D. Marshall) to appoint an additional Parliamentary Secretary to deal with the fishing industry, he gave a disappointing reply, and said that we can have too many Ministers. This time it is clear that the Prime Minister, in coming to a decision, has judged the matter on its merits, and has decided that the circumstances are such—and we can all agree on that—that an additional Minister should be appointed.
I hope that will be taken as a precedent and that, in future, whenever the Prime Minister is asked to appoint additional Ministers for any particular purpose, he will consider the matter on its merits. I venture to hope that, in the light of the Bill which has been introduced this afternoon, he will give further consideration to the suggestion put forward by my hon.


Friend the Member for Bodmin, because I believe the important part that fish has to play in the food of the nation at this time is such as to justify the appointment, at any rate during the emergency, of an additional Minister. Therefore, I welcome this Bill for itself, and also as a precedent which I hope will be followed when the circumstances again appear to justify similar action.

8.14 p.m.

Colonel Ropner: Before this Bill receives its Second Reading, I should like to remind the House of paragraph 19, Part I, of the Report of the Select Committee on Offices and Places of Profit under the Crown. I hope the House will not consider I am being tedious in doing so. In 1941 the Select Committee examined and reported on a very large number of questions, including the holding of office by Members of Parliament. It expressed concern lest the number of Members owing allegiance to the Government became too great a proportion of the whole House. I imagine that the word "allegiance" was used in rather a special sense. The report stated that one
of the three chief principles which by the beginning of the 18th century had become, and have since been, and should still be the main considerations affecting the law …
was
… the need to limit the control or influence of the executive government over the House by means of an undue proportion of office-holders being Members of the House …
In normal times, I believe it is true to say, there are 62 paid Ministerial offices, the holders of which are entitled to sit and vote in this House. All right hon. and hon. Members will agree that there is an obvious danger about the proportion of those Members who owe allegiance to the Government in this sense, becoming too large. If the Government had a normal majority today, or if any Government had a normal majority, the position would be that rather less than one-quarter and rather more than one-fifth of the Government supporters in this House would be entitled to sit on the Treasury Bench. I do want the House to consider whether there is not a very real danger in the growth of that tendency to create too many paid Ministerial posts in the House.
I would only add that I am not sure that the Government are right in believing that when they are faced with difficulties they can solve those difficulties by creating a new Minister. I do not know what has happened to the Minister of Economic Affairs. I imagine that shortly after his birth, he died. Although we have heard during the last few minutes considerable blessings on the creation of this new Minister—with which I do not disagree—I think it is a dangerous principle to believe that problems are going to be solved by creating a new Minister. I hope I have said enough to persuade hon. and right hon. Members on both sides of the House to watch very carefully the tendency to create too many Members who are entitled to sit on the Treasury Bench.

8.17 p.m.

Mr. Charles Williams: The hon. Member for East Aberdeen (Mr. Boothby) in his remarks, with some of which I agreed, said he could not imagine why it was that the Minister of Food was not in the Cabinet and the Minister of Agriculture was. I think the answer is fairly simple—although my hon. Friend would not realise or know anything about that side of it. The Minister of Agriculture is also the Minister of Fisheries, and that puts his place up much higher.

Mr. Boothby: The Minister of Agriculture and Fisheries has nothing whatever to do with either the agriculture or the fisheries of Scotland, and that is what I am concerned about.

Mr. Williams: Perhaps that is why they are behindhand. Quite frankly, I realise that in the difficulties of the day it is almost impossible for any private Member to criticise the actions of this House. We must rely, as I would, on what the right hon. Gentleman says—that it is absolutely necessary in order to face this emergency that he should have this additional Minister. On an occasion such as this, realising, perhaps more on this side of the House than do some of the hon. Members who sit behind the Minister, how difficult his position is, we cannot oppose the setting up of this new Minister. We do realise at the same time that it is absolutely essential today to coordinate under the Chancellor of the Exchequer both the finances, as represented by the Financial Secretary to the Treasury, and also the economic duties of the new Minister under this Bill.
Up to that point I have no disagreement, but I maintain that this endless setting up of new Ministers constitutes a real danger to the House of Commons. This tendency has been growing over a period of years, and, with the setting up of new Ministers, instead of the power of hon. Members of the House of Commons growing, it is only the power of the Executive which has grown. That power of the Executive is getting more and more remote from the actual constituencies. Having watched the House of Commons for some years and having tried to understand what goes on here, I say that whenever new Ministers are set up, we tend to weaken the power of the ordinary back bench Member and of the ordinary constituent.
For those reasons, while not wishing to hinder the Chancellor in any way, I protest very strongly against the setting up of a new Minister, not on the grounds that he may not be wanted for this purpose, but because this constitutes a danger which has been growing during the last 20 years or more and on which, I have little doubt, far better speeches have been made by some of the right hon. Gentlemen opposite than I could make. It is a matter on which every back bench Member should raise his voice from time to time. It would not, be right to accept this Bill blindly. It is necessary for the moment, but it is also one more link in the chain which binds and restricts the power of the ordinary Member of Parliament.

8.22 p.m.

Sir Waldron Smithers: In spite of the harmony which exists tonight in the House, I feel I cannot let this Bill have a Second Reading in silence. I wish to protest against its introduction in this sudden manner. I wonder why it was necessary to introduce it so suddenly. If the Bill goes through, I want hon. Members to let it go through with their eyes open. This Measure is further evidence of the "Crippsian" mentality, if I may say so. It sets up another dictator. My hon. Friend the Member for East Aberdeen (Mr. Boothby) and my hon. and gallant Friend the Member for Barks-ton Ash (Colonel Ropner) have both called attention to the increase in the number of Ministers who have almost dictatorial powers. The Chancellor of the Exchequer himself, in the last week or so, has become the economic and financial

dictator of Britain. The appointment of this further Minister; who, after all, will only be a puppet of the Chancellor of the Exchequer, and will have to defer to him, is another step down the totalitarian road.
We all know that the ambition of the Chancellor of the Exchequer was to introduce and pass in all its stages on the first day of a Socialist Government a Bill by which everything could be done by decree. The Prime Minister, whose name is on the back of the Bill, when he was writing in "The Socialist Plans for Local Government," said that they would set up a regional authority who should be a commissioner, and added:
He is not impartial. He is a Socialist, rather like the Russian plan of commissars.
We are setting up another commissar tonight. The appointing of this extra Secretary is only part of the dictatorial technique. All over Europe today we can see that facade of democracy. Anyone, however, who has studied the thing at all, as I have tried to do, and who has met people who have come back from the Continent, knows perfectly well that this facade of democracy is just a farce. People can do nothing except with the permission of the Russian key man. As my hon. and gallant Friend the Member for Barkston Ash said, if we add up the number of junior Ministers who have almost dictatorial powers, we shall find that this Government is getting the totalitarian powers of the Russian Government.

Mr. Boothby: If we are really doing that, we should be shooting them rather than instituting new Ministers.

Sir W. Smithers: I should not have dared to raise that point, but as it has been raised, I hope, Mr. Speaker, you will allow me to pursue it. I should like to shoot the lot. The appointment of yet another Secretary means that there is going to be more and more direction of labour, of material, and of money. There was a White Paper published yesterday requesting Capital Issues Committee to refer to a Government Department before they act. All that increases the power of this Socialist Government. As for the direction of labour, if they try to direct labour or money or goods from Whitehall——

Mr. Boothby: That is the subject of the next Debate.

Sir W. Smithers: —they set in motion forces which they have not thought of and over which they have no control. For instance, this Government released some time ago all the bricklayers from the Army, but they forgot to release the brickmakers. There were no bricks to be laid. Again, today, they are directing men into various industries.

Mr. Boothby: The hon. Member has got the wrong Debate.

Sir W. Smithers: Am I going beyond the point, Mr. Speaker? I want only to show how the increase in the number of these people with totalitarian powers is harmful to the country. I want to show—this is quite a short little statement, Mr. Speaker—that we have thousands of trainees in the bricklaying trade. The Government brought them into the industry and then gave a bonus scheme to increase output, but they quite forgot that——

Mr. Speaker: I think that might be a useful matter to discuss when the Economic Secretary is appointed.

Sir W. Smithers: I am trying to bring forward arguments to stop his being appointed. I do not want to overstep the Rules of Order, but will you, Sir, allow me to go a little further, because I have a good example and I want to finish it? It is to show you the awful muddle that State control makes. It takes much longer to train a bricklayer than, say, a plumber or a carpenter, and the result now is that we have got thousands of houses going up all over the country—[HON. MEMBERS: "Hear, hear."]—well, hundreds of houses—but they are only the shells of the houses, the bricklaying part, because of the bonus scheme, and there are not enough plumbers and carpenters to make the houses fit for people to live in. Therefore, I, for one, protest most strongly against the appointment of another puppet under our financial and economic dictator.

8.31 p.m.

Sir William Darling: I rise to support this Bill in but a few sentences. I should like to ask the Chancellor if he can answer this question. If it is necessary now to appoint an Economic Secretary to the Treasury, should that appointment not have been made when we appointed a Minister for Economic

Affairs? Is it the fortuitous, incidental resignation of the former Chancellor which promotes the necessity for this appointment? It would seem to me to be either too late or unnecessary. If the appointment is necessary, then it should have been made many weeks ago.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Parson.]

Further proceedings postponed, pursuant to the Order of the House this day.

MINISTERS OF THE CROWN (TREASURY SECRETARIES) [MONEY]

Considered in Committee under Standing Order No. 69.—(King's Recommendation signified.)

[Sir ROBERT YOUNG in the Chair]

Resolved:
That, for the purposes of any Act of the present Session to provide for the salary of an Economic Secretary to the Treasury, it is expedient to authorise the payment out of moneys provided by Parliament to any such Secretary of an annual salary not exceeding two thousand pounds."—[Mr. Glenvil Hall.]

MINISTERS OF THE CROWN (TREASURY SECRETARIES) BILL

Considered in Committee, pursuant to the Order of the House this day, and reported without Amendment.

Motion made, and Question proposed, "That the Bill be now read the Third time."—[Mr. Glenvil Hall.]

Sir W. Smithers: I am amazed that the British House of Commons allows a Bill of this importance to go through in only o minutes, and I again repeat my protest.

ELECTRICITY (SPECIAL ORDERS)

Resolved:
That the Letchworth and District Electricity Special Order, 1947, dated 5th September, 1947, a copy of which Order was presented on zest October, be approved."—[Mr. Pearson.]

Motion made, and Question proposed,
That the Pontefract Electricity Special Order, 1947, dated 5th September, 1947, a copy of which Order was presented on list October, be approved."—[Mr. Pearson.]

8.36 p.m.

Mr. Erroll: I do not wish to raise this matter in any controversial spirit. I have experienced great difficulty in finding out any reason why this order should be placed before the House tonight. It 'appears to transfer the electricity undertaking of the West Riding Automobile Company to the Pontefract Electricity Company. Within such a short time of the inception of the British Electricity Authority, it is very hard to find any justifiable reason for this change taking place. There must be a good reason for it, but it is impossible to find out from the Library or anywhere else. I understand that the Minister of Fuel and Power issues an annual report of orders which have been approved, but this is a mere list, and it does not give any reasons for the orders; nor does it give any indication of the orders which still remain to be approved. In the circumstances, it would be desirable to have some information as to the reasons for this Order.

GAS (SPECIAL ORDERS)

Motion made, and Question proposed,
That the Draft of the Special Order proposed to be made by the Minister of Fuel and Power, under the Gas Undertakings Acts, 1920 to 1934, on the application of the Pontypool Gas and Water Company, which was presented on 21st October and published, be approved."—[Mr. Pearson.]

8.37 P.m.

Sir John Mellor: Is there not any Minister present to reply on these orders? I do not wish to raise any point on this order, but merely to ask whether my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) is not to have an answer to the point he raised on the last order. I think we should have some explanation of the absence of any Minister to deal with any points hon. Members may wish to raise on these orders.

The Secretary of State for Scotland (Mr. Woodburn): Perhaps the hon. Member will raise his point, and then it will be dealt with.

Sir J. Mellor: I ask then for an explanation of this order.

Mr. Woodburn: If the hon. Member reads the order, he will see quite clearly what it stands for.

Motion made, and Question proposed,
That the Draft of the Special Order proposed to be made by the Minister of Fuel and Power, under the Gas Undertakings Acts, 2920 to 1934, on the application of the Mayor, Aldermen and Burgesses of the Borough of Caernarvon, which was presented on 22nd October and published, be approved."—[Mr. Pearson.]

Sir J. Mellor: Is not the Parliamentary Secretary to the Ministry of Fuel and Power, or someone who represents that Department, present? [HON. MEMBERS: "He is here."] I am glad that he has arrived. No doubt he will now have an opportunity to apologise for not being here earlier.

Mr. Erroll: I have had some trouble in ascertaining the purposes of these various orders. I raised a question in regard to the Pontefract Electricity Special Order, but unfortunately the Parliamentary Secretary was not here to answer my remarks. I should like to raise a similar point in regard to this order. It has been impossible for me to find, in the Library or anywhere else, any information about these orders, and why they are necessary, especially in this case, in view of the fact that the industry is to be nationalised in the current Session of Parliament. I think that we are entitled to some explanation why these orders are necessary.

8.40 p.m.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): Some time ago a regulation was made to enable my right hon. Friend to increase the maximum price of gas. That did not apply to undertakings which had authority by Statute to increase the price since the Defence Regulations were brought in. Therefore, we could not use the power under Regulation 56 of the Defence General Regulations to authorise an increase in price, and this method had to be adopted. The borough of Caernarvon is suffering from the same disability as many other gas undertakings, namely, an increase in the price of raw materials. This has made neces-


sary an increase in the price of gas to bring it beyond the maximum statutory price. This order is to enable the borough to recoup itself in accordance with the regulation which the House previously approved in respect of general undertakings.

8.42 p.m.

Mr. Charles Williams: The Parliamentary Secretary deserves the thanks of the House for having come here and read his brief so well. He has made quite clear what has happened to the Caernarvon gas industry. It is that owing to the mismanagement of the Government the price of raw materials has gone up so that the poor unhappy citizens of that borough must pay. I thank the hon. Gentleman for showing so clearly that because of the incompetence of the Ministry of Fuel and Power the people of Caernarvon are having inflicted upon them this extra expense.

Resolved:
That the Draft of the Special Order proposed to be made by the Minister of Fuel and Power, under the Gas Undertakings Acts, 1920 to 1934, on the application of the Spenborough Urban District Council, which was presented on 28th October and published, be approved."—[Mr. Pearson.]

REGISTRATION FOR EMPLOYMENT ORDER

8.43 p.m.

Mr. Frank Byers: I beg to move,
That the Registration for Employment Order, 1947 (S.R &amp; O., 1947, No. 2409), dated 11th November, 1947, a copy of which was presented on 11th November, be annulled.
This order is only part of the whole scheme of the direction of labour in peacetime which the Government are seeking to introduce in this country. I hope that tonight I shall have the support not only of all those who have opposed the direction of labour in the past, but also of all those Members who find this order in itself objectionable. I want to make a sincere appeal to the Minister of Labour about this order. I feel that a mistake has been made. I do not want to make it difficult for him to withdraw the order if he feels that, in justice, it should be withdrawn, but I hope the House will annul it for several reasons.
The object of the order is to compile a list of "spivs, drones, eels and butterflies," and to compel them to take up essential work. But there is no definition of any of these classes in this order. In the evidence given before the Select Committee on Statutory Rules and Orders, Sir Harold Wiles, of the Ministry of Labour, said that what the Prime Minister loosely called "spivs and drones" were not easily definable, and that the Ministry would have to find, by trial and error, whether they were getting the people the Government were after. As a Liberal that made me shudder. The idea of trial and error—[Interruption.] I am entitled to shudder if I want to—or am I not? The Select Committee on Statutory Rules and Orders, in their Third Special Report, on page xxvii, drew attention to the undesirability of what is called "Five-tier legislation." I believe that this is vitally important from the point of view of the future of our Parliamentary democracy. The Committee stated:
Your committee have sometimes had to take note of a pedigree of five generations—

(a) the statute:
(b) the Defence Regulations made under the statute:
(c) the orders made under the Defence Regulations:
(d) directions made under the orders: and
(e) licences issued under the directions."

They then went on to say:
Your Committee hope that, now that hostilities have ceased, Departments may find themselves able so to frame any order made under Defence Regulations that it will be selfcontained—in other words, to be content with the grandchildren of the statute and not to bring its great-grandchildren or great-great-grandchildren upon the scene. It is by no means clear that Parliament contemplated these cumulative delegations. They tend to postpone the formulation of an exact and definite law and they encourage the taking of powers meanwhile in wider terms than may ultimately be required.
I believe that it is most important that the House should recognise a considered statement from the Committee. That statement, taken together with the words of Sir Harold Wills, which appeared in the White Paper issued on Monday, shows to what extent this order is at variance with the British conception of Parliamentary Government. Where a person's liberty is infringed—and whether hon. Members agree with it or not this registration is an infringement—the


citizen has a right to know precisely what his rights and obligations are; to know exactly where he stands. He cannot tell that from the order as it is at present. That was quite clearly revealed in the evidence given before the Select Committee. It was also quite clear that the Government could not define the people they want to register. Hence this phase of trial and error. They will not know until this thing has been working for some considerable time and a number of people whom they do not want have registered, who it is they are trying to catch. "Trial and error" means indignity and suffering to some people. There is no provision made in the order for the conscientious objector to registration. [Laughter.] Hon. Members opposite may laugh, but there are people with religious views in this country, whose views one must respect, who have a conscientious objection to registering.

Mr. Tolley: They are not being asked to fight.

Mr. Byers: An hon. Member opposite says that they are not being asked to fight. I did not say that they had a conscientious objection to fighting. They have a conscientious objection to registering. [HON. MEMBERS: "Spivs."] We have had the same results over the closed shop. We have people who sincerely hold conscientious objections. I am pointing out that there is no provision in the order to cover such cases. I feel that there should be such a provision. I say that no Parliament should accept the view that a Government should be given powers as wide and undefined as those which will enable the Executive to tamper with the lives of citizens upon the basis of trial and error, without reference to any principle whatsoever.
I think that we know the key to all this. It is to be found—and I hope that this will not be interpreted as a personal attack on the witnesses who gave evidence, because I do not intend that; they are very able and competent people—in the answer given by one witness, when he was asked:
You do not feel any difficulty about this sub-delegation?
His answer was:
Administratively it is much easier.
That is the danger, that administratively it is much easier if a notice can be put

up defining the sort of people that are wanted, and if it does not do what is wanted, then another notice is put up. I do not believe that pays sufficient respect to human personality and to the individual. As I said, when I read the evidence given before the Committee, I shuddered, because here we have people saying that there is nothing new about it and that it is just the old system that we used during the war and we are just carrying it on.
We have heard a lot in the evidence about public notices, about which I will say a word or two in a moment. The point of the evidence given here is that there is no real respect for the individual. It is a question of putting up a notice and if it does not work the first time, then another notice should be issued and same other people should be called in, and so forth. I do not believe that that is the intention of the Minister himself. I believe he wants to be human about this thing, because if he reads this as I read it, I am sure he will realise that there is not sufficient attention paid to the individual in the evidence which was given.
I want to say a word about public notices which seemed to creep into this matter of the relation of the order to the individual. Having our attention directed to delegated legislation, we find people compelled to register not by an order but by a public notice. We are told that the public notices will tell everyone within certain age groups and categories that they have to go and register at the employment exchanges, and it will warn them what the penalties are. There does not appear to be any notice in the order about what the penalties are for not registering. Are the penalties to be exactly the same for not registering as for failure to obey a direction? I should like that to be cleared up. I did not think there would be such a penalty, but definitely it is to be put up in a public notice. Who the people responsible for the public notices are is not quite clear. One of the witnesses was asked to give a definition of what was a public notice. His answer was:
A public notice is in fact a poster which is put up at Employment Exchanges, Post Offices, and so on. Secondly, a public notice is always given on the B.B.C., and it is announced in the national Press. Those are the three ways in which it is done.


Would you consider that, say, some notice put up, shall we say, somewhere in London, would constitute a public notice?—No.
Is it put up at every Post Office in the country?—I am not quite sure about that I cannot answer that.
In other words the definition of a 'public notice' is somewhat vague?—Yes.
Are we really going to allow legislation of this sort to go through? It is going to be important to the people who are called upon to register that they should know—they have a right to know—exactly what they are going to undertake. [Interruption.] This is going to affect hundreds and thousands of people, and if this House is not prepared to go into the details of an order of this sort, then we might as well pack up British democracy.

Mr. Tiffany: Can the hon. Gentleman tell us what is the attitude of the young Liberals to this particular thing?

Mr. Byers: I regret I do not know what is the attitude of the young Liberals, but what I say is that the view which I am putting forward I believe to be right and I will challenge anybody on it. We do not go by counting numbers or heads; we go for quality. I want the Minister to look at the order in this light that psychologically it has now become extremely offensive, quite apart from the offence which is committed on the liberty of the people. Every person called upon to register now is, because of the Prime Minister's unfortunate speech, subject to the stigma of being a spiv or drone. [Interruption.] Oh, yes. I prophesy to hon. Members that there will be something disreputable about the people who are called upon to register under the order. This order has come to be known as the "Spivs and Drones Order." That appears in the evidence in the White Paper. It was mentioned by the Minister of Labour and it has been mentioned by the Prime Minister, and yet we are to proceed on the basis of trial and error.
I do not believe that the Government can go on now because of the way in which they have led up to this order. Some perfectly worthy people in all walks of life will be called up to register and give details of themselves—not just spivs and drones—because we are working on

trial and error. That stigma is bound to attach from now on to the people who register.
The next reason for rejecting the order is that it leaves entirely in the hands of the Minister the definition of what is essential work. No Minister can answer that question. It is a matter upon which Parliament, and not just the Minister, must pronounce its decision. The matter must be defined by Parliament. It should at least be debated by Parliament. Essential to what? The decision as to what is essential—who is to judge?—cannot be left in the hands of the Executive. There is no definition covering that matter at all in this order, which merely says words to this effect: "for purposes of work which shall appear to the Minister to be essential." Who is to judge whether a man who sells antiques is essential? I put that question to the House.

Mr. Pritt: That is a good question from a Liberal.

Mr. Byers: I do not think that the hon. and learned Gentleman can really call me, at my age, an antique.

Mr. Pritt: I referred to the attitude of mind.

Mr. Byers: I ask the House to look at an example to show the difficulty confronting the Minister in deciding what is essential. If a man who keeps an antique shop merely sells to British citizens, he is a waste of manpower, and is not essential. If an American happens to drop into his shop and buys something for £10,000 and pays for it in dollars, the shopkeeper becomes a national hero, part of the export drive, and one of the people who are vitally essential to the recovery of the country. Does anyone suggest that the Minister of Labour has the gift of prophecy and knows whether a man is or is not going to be a waste of manpower?

Mr. Ungoed-Thomas: Would not that question also apply to Parliament?

Mr. Byers: I suggest that Parliament should have the opportunity of debating the matter. I want every possible opportunity for debating matters which are going to affect the individual. The Government no doubt will say: "We have no intention of registering antique dealers


or any other legitimate traders." They will probably say that they will not register artists—or will they? Who is to define whether an artist is essential and whether he is employed upon essential work? What about dress designers? Is dress designing an essential job? It depends not only upon the dress designer, but upon what happens later on to the dress. If the dress goes for export, of course it is essential. I have produced those examples because I think it is wrong for the Minister to take power to decide what is essential and what is not. Something which is essential at this moment may not be essential in a few months' time. We found that over the capital investment programme. Things that were essential a year ago are today, perhaps, not essential. All that ought to be debated, because it will affect the individual. I do not believe that it is a power that we ought to leave in the hands of the Minister without circumscribing it very carefully indeed.
The Government are, moreover, taking powers to register "classes and descriptions of people." That is a most dangerous phrase. What is meant by "classes and descriptions of people"? That is an extremely wide power. It can be used to register with a view to directing any class or description of persons merely by issuing one of these public notices to which I have referred. I do not want to be accused of following the hon. Member for Orpington (Sir W. Smithers), but— [Laughter]—I want hon. Members to look at this point quite seriously because this may well be a turning point in democracy, as it was in prewar Germany. If hon. Members will look at the Measures passed under the Bruning Government, they will discover that they paved the way, not for any misuse by Bruning, but for a legal revolution by Hitler. I am not saying that will happen here, or that there is any intention whatsoever—I am sure there is no intention whatsoever—on the part of the Government Front Bench to do anything of that sort, but the power which the Minister is taking in this order could be used by an Unscrupulous government to stifle opposition in this country. That is true.
Powers very little wider than these are being so used today on the Continent of Europe. Under this order, with this power

to register classes and descriptions of persons, political agents could be one of the classes of persons to be registered with a view to direction. It is no use the Government saying that is not their intention. I do not believe it is their intention, but Governments change. The power exists to direct all the employees of the political headquarters of a party one may not like. I do not think it matters at all that the power is in the hands of the present Minister of Labour.

Mr. Ellis Smith: Would it be a danger if the Tories got back?

Mr. Byers: I believe that there would be just as much danger if that party got back as if the present party got back.

Mr. Shurmer: That contradicts what the hon. Gentleman has just said.

Mr. Byers: I was talking personally about the Minister of Labour and not about the Labour Party. There are some Members of the party opposite whom I do not trust one inch when it comes to personal liberty.

Mr. Tolley: Names.

Mr. Byers: We could give names without much difficulty. When we see the attitude adopted by certain hon. Members opposite to Continental regimes which have sprung up and are completely totalitarian, we ought to be extremely careful whom we trust in power. The point I want to make is that the power exists to direct people, and it can be used, and could be used by an unscrupulous Government, without any further resort to this House. There is power in this order to direct journalists. It may be said that there are too many journalists——

Mr. Follick: There are too many in this House.

Mr. Byers: They are "classes and descriptions of people." There may be a feeling that there are too many journalists in one town. Under this Order they could be called upon to register with a view to being directed anywhere in the country.

Mr. Henry Strauss: They could be directed away from journalism.

Mr. Byers: Yes, they could be directed away from journalism. It would be possible to break a newspaper. If I were an unscrupulous dictator, I would ask for very little more than the powers in this order to break the opposition. I do not propose to show hon. Gentlemen how to do it. There is a power in this order to register married men with a view to taking them away from their homes.

Mr. McKinlay (Dumbartonshire): Is that something new?

Mr. Byers: No, but the fact that it was going on during the war——

Mr. McKinlay: Is the hon. Member postulating that the only people who should be directed are the people who are hungry?

Mr. Byers: The hon. Member perhaps does not know that I was fighting side by side with the Labour Party in the interwar years, trying to remedy the very conditions about which he is talking. I spent my time up in Newcastle, Jarrow, and elsewhere, and then came back here trying to persuade people to do something about the miserable conditions. However, the mere fact that there was that unemployment and compulsion of labour in those days is no reason why it should be done by order today. I cannot understand hon. Members opposite who call themselves progressive. The only argument they have in favour of this order is that it happened before the war. That is Conservatism. In this order we take the power to register British people and foreigners. Have we had much success in getting Poles into the engineering industry? No. Some industries will not take foreigners, they will only employ conscripted British.
This order is offensive to the liberty of the subject in peace time, and it is no use hon. Members opposite saying that we are in just the same position now as we were in before the war.

Mr. Shurmer: No one is saying that.

Mr. Byers: A lot of hon. Members on the other side of the House say, "You cannot object to taking these powers because we are facing the same kind of emergency as we faced during the war." The point is that during the war we turned ourselves, quite rightly, into a totalitarian regime, and we all agreed because that

was the only way to fight Fascism with a view to regaining our freedom.

Mr. Tiffany: Oh.

Mr. Byers: Perhaps the hon. Member was fighting elsewhere, but that is what we felt. The object of turning the country into a totalitarian regime was to win the war and then get back to freedom. Therefore, it is no argument now to say, as was said by the witnesses before the Select Committee, "We are merely carrying on as we were during the war." That is no answer. We fought that war to restore our freedom, and yet our freedoms are now being taken away from us under various pretexts and guises. I say that this order paves the way for a legal, social revolution in this country in the event of any Government wishing to set up a totalitarian regime. I exonerate the right hon. Gentleman, but he must adroit that the power is there and can be exercised.
Not only is this order offensive, it is unnecessary. If the Government have no intention of offending against the ordinary principles of liberty, they do not need the order; if they have the intention of offending against the ordinary principles of liberty, then it should not be passed. Page 3 of the White Paper on Capital Investment in 1948, states that:
During the last two years six million workers have been transferred from the Services and war production to peace production.
All that has happened now is that we have discovered that the planning was not good enough, and steps are being taken to make it better. But if six million workers can be transferred to peace production in two years without the direction of labour, and without much difficulty, the case for attraction of labour against that for registration and direction is proved to the hilt.

Mr. Shurmer: A remarkable achievement.

Mr. Byers: Then why take your eye off the ball at this important point in our history and go in for this type of heresy hunting?

Mr. Shurmer: Because the spivs and drones of the country would all go through.

Mr. Byers: The hon. Member does not do himself justice, as usual. We have


the authority of the Permanent Secretary to the Ministry of Labour that it would take two civil servants to catch a spiv—that means lo register a spiv. That is reported in the "Manchester Guardian," from a Press Conference. I believe that to be an accurate and expert forecast. We have proof conclusive that we cannot work an order of this sort, and that it will take two civil servants to catch a spiv, which to my mind is proved conclusively by our experience over deserters. There are 21,000 deserters who have not yet been, caught. Is the right hon. Gentleman really expecting that, after all the appeals and exhortations, and the leniency which has been shown, when a public notice goes up on 8th December demanding—not appealing, but demanding—that deserters shall turn up at the employment exchanges, he will get many of them to do so?
The right hon. Gentleman knows as well as I do that this order is rotten to the core. He knows it cannot be worked, and is going to be totally ineffective. Instead of increasing our manpower, it is going to waste manpower. It will mean that literally thousands of people will be taking their eyes off production in order to try to catch people who will be of very little use when we get them. Because people will fail to register, it will take up the time of enforcement officers, of the police, of the employment exchanges, and of appeal tribunals. It is going to take up the time of hundreds and thousands of people who should be better engaged. The House should have no hesitation whatever in annulling this order, which is offensive to the liberty of the subject, and because of the stigma which is now attached to it, is bound to be ineffective. We have expert evidence about that. It gives far too wide powers to the Minister, powers which should not be given to any Government. If a Government cannot govern without an order of this sort, they ought not to govern at all.

9.14 p.m.

Mr. Hopkin Morris: I beg to second the Motion.
The order is made under the Defence of the Realm Act Regulation 58A, which imposes a special burden on the subject. It imposes the burden of personal service. We are not concerned tonight with direction of labour, but with registration for the direction of labour. Whatever one's views about direction of labour, hon.

Members will agree that no more onerous burden can be put on the subject than a demand for his personal service to the State. In what way is that burden placed on the subject? First, there is the Statute, then the regulation, and then the statutory order under the regulation. When we come to the statutory order, the House has but a limited power. The House has power of complete discussion of the Statute, but on the order the amount of attention the House can give is very little. All we can do is to pray for the annulment of the order and nothing more.
But this regulation does not stop there; it goes a good deal further. It says that there is to be a public notice before the conditions can be known. The public notice does not come before this House at all. We have no opportunity even of a limited discussion or an opportunity for the annulment of the public notice. That is a most important matter as far as this House is concerned. If it is borne in mind what I said at the beginning of my speech, that the most onerous imposition we can put upon the subject is a demand for his personal service, surely, if there is one matter which the House should be able to discuss it is that burden? That is one matter which we are precluded from discussing in these proceedings. As my hon. Friend pointed out, it is proposed in the worst possible form.
This order deals, in general terms, with general classes. If one looks at paragraph 3, one sees it stated:
If the Minister from time to time by public notice so requires, any person of either sex who is at the date of the notice in Great Britain, or not having been in Great Britain at that date subsequently enters it, or any such person of any class or description specified in the notice. ….
There is no indication in this order who the persons are, no indication of what class they belong to, no indication of the sex involved, no indication whatever as to whom the order is directed. Surely, the first rule of law is that a citizen should know what his obligations are, and that the law should be uniform? The subject should know, but he is not to know under this order—there is nothing to indicate to him—how his duties are to arise, what obligations he will be called upon to discharge. That is all the more grievous because criminal penalties follow. He


does not know what his obligations are, but he is to be subjected to pains and penalties if he does not conform to the order. If the Government are to impose penalties, surely, they should make the duty clear and well defined, and the subject should know beforehand that he is involved, what classes are involved, what the obligations are, and there should be an opportunity given to this House to discuss that before any penalties are imposed.
There is no opportunity to discuss all that under the order. What my hon. Friend has said is very true. This is the beginning of dictatorship. It is the essence of dictatorship that the dictator can vary the law, vary the penalties, vary the class at will—that is the very essence of it—vary them as he thinks fit; he can introduce or vary them by notice. I wish to make one other observation, because the term has cropped up in the Report of the Select Committee, that when we begin to talk about spivs and drones in terms of moral obloquy, that notice, by giving a moral classification to, and making a moral animadversion upon, a class, by singling out a class and legislating for a class, is also the essence of dictatorship. It is exactly like the singling out of a race—the Jews—in Germany. That is to be deplored.
Not merely are the classes unknown under this order, but the form of the notice is unknown also. If one refers to paragraph 5 of the order, at the top of page 3, one sees:
It the Minister from time to time by public notice or otherwise …
He is not even bound by the public notice, he can proceed by means of any other form. When the Minister's representatives were asked by the Select Committee what "otherwise" meant, they had no clear idea, any more than they had any clear idea of what "public notice" meant. All they thought it meant was a poster which would be put up in the employment exchange, a poster that would be put up in the post office, or something one would hear about if one listened to the wireless. Are we to put a person's duties upon the chance of his listening to the wireless? It places obligations upon him which may involve him being fined or imprisoned on the chance

of his having heard a broadcast on the wireless. That is what is in this order.
Surely, the first obligation is that the order should define the classes that are called upon to register. It should define them in clear, well specified terms. It should define the sexes and ages. What is the objection to it? The objection given before the Select Committee is that this is a convenient form of doing it. If it was put in the order, the Government would have to come to this House or face a Prayer for annulment if they varied the order. Therefore, they are trying to escape their responsibility to the public through their accredited representatives in this House. The administration do not like to have their activities discussed. It is much more convenient for them to carry out their activities without being open to Parliamentary discussion. That is what this involves. That is what this order does.
I am not discussing the legality of the order, because that raises another point. It may very well be disputed in the courts whether this order is valid or not. That is a different issue. Let me remind the House what perhaps is not irrelevant to this issue, that an attempt was made in this country at one time to legislate by proclamation. We know what a proclamation is. We do not know what a public notice is. I have done my best to find out the definition of a public notice, but I could not find any definition at all.

Mr. Quintin Hogg: There is not one.

Mr. Hopkin Morris: But I know what a proclamation is. Parliament has placed severe limitations upon the ability to legislate by proclamation. It has hedged it round, and gradually withdrawn one piece of the prerogative after another. An attempt was made in a time of famine in this country to place an embargo upon ships laden with wheat and flour. That was done at a time when Parliament was not sitting and the legislation was made by proclamation. If there was a time that would have justified legislation by proclamation, it was then when Parliament was not sitting, but, notwithstanding that, an Act of Indemnity had to be passed. That is how Parliament protected its rights.
I appeal to the Minister of Labour to withdraw this order. I am sure that he never intended the consequences of it. The Select Committee have rendered a signal service by drawing the attention of the House to this matter. The Select Committee have rendered a signal service to every labouring man and woman throughout the country. I wish that hon. Members opposite would look at it carefully to see what they are doing. This is an issue of our own right and opportunity to defend the liberties of the subject. If we have prohibited legislation by proclamation since 1776, except in wartime, are we now to hand it over to something called a public notice, with no better defence than that it was found useful in times of war? That is the only period—the last seven years of war—upon which justification rests. Is that what we are to do? Is that what this House wants, because that is the issue which we are called upon to determine? I hope that the House will not agree to that.

9.25 p.m.

Mr. Hollis: I should like to associate myself very strongly with what the hon. Member for North Dorset (Mr. Byers) said in his appeal to the Minister to withdraw this order. Unapparent as it may seem, there is a very large measure of common ground and agreement between practically all hon. Members on certain points. The first point upon which there is general agreement is that direction of labour in itself is a hateful and intolerable thing. I think there can be very few hon. Members who do not agree with that. The hon. Member for Westhoughton (Mr. Rhys Davies) was on completely unassailable historical ground when he said that the whole idea of the direction of labour was not only contrary to the general traditions of this country, but also contrary to the traditions of the Labour Party, and I think there will be general agreement on that.
There must be general agreement also on the second point, which is a question of fact, and that is that the opinions of the Government and of hon. Members opposite have been changing with kaleidoscopic rapidity. Not long ago, the Prime Minister said that he was opposed to the direction of labour, and the Trades Union Congress were opposed to it. The right hon. Gentleman himself was opposed to it then. He said that, if we had direction of labour, we would have

very little of it and no one must be moved from his house. Then they would sometimes be moved. So that changes of view have taken place. The last tune we discussed this matter, the right hon. Gentleman said that nobody would be directed unless offered an alternative job, but it turned out a few days afterwards that a gentleman was directed without being offered an alternative job. When the matter was raised in this House, the right hon. Gentleman did something which always wins and will, I hope, always win, the sympathy of this House. He replied that there had been a mistake, he apologised and he said the mistake would be rectified. It is because he made that reply in that spirit that I make this appeal to him to act in a similar spirit on this much larger question that we are discussing tonight.
It is quite obvious that, since opinions are changing so rapidly, we cannot be content with mere assurances from the right hon. Gentleman or his Parliamentary Secretary that, up to the present, only a very small number of people have been directed. We cannot be content with that for two reasons. The first reason is that nobody in this House can be content with an assurance that an injustice has only been imposed upon a few. That is an intolerable proposition. An injustice is still an injustice, whether imposed upon a few or whether the number runs into five figures. The second reason is that we cannot be content with such an assurance because we cannot know what sort of a situation we are likely to face in future. At present, we are in a sort of half-way house, which is nonsensical. There is one point of view which is held on this side of the House, and it is that we object to the direction of labour at all because it attacks traditional British freedom. The other point of view is to incur the enormous odium of the decision to impose this new system on the country. It is absurd for the Government to impose the new system, incur the odium, and, at the same time, say that they are not going to use those powers.
Nobody can be content with the situation at present. If this particular situation is changing with kaleidoscopic rapidity, obviously, so also is the general economic situation of the country changing with equal rapidity. We have the word of Ministers themselves that there


is a possibility of catastrophe facing this country, and, if that happens, one of two things may happen. Some people may say that this policy of the Government on the direction of labour had not only been tyrannical but futile, while some others may use the wholly contrary argument and say that, in this new totalitarianism an illogical compromise had been adopted in attempting to preserve some relics of the old freedom.
That being so, surely, the more sincere the right hon. Gentleman is about not wishing these things to happen, the more sensible it is for him to go very cautiously, and to take the House hand in hand in his policy, and not to take wide powers of which he himself does not in the least wish to make use. Instead of that, we find this order. Far from having delegated legislation, we have here a delegation of a delegation of legislation through this use of a public notice, a word which nobody can define, and of which a citizen is under obligation to know, though he may well not know of it. And if the interpretation of the hon. Member on the Front Bench is correct—and I hope that the Minister will tell us it is not—a man is to be punished if he does not listen to the B.B.C., and does not know that such a public notice has been issued. Instead of definite and intelligible obligations being placed upon citizens, we have absolutely undefined and unlimited obligations such as we find under paragraph 3 (b) or under paragraph 7 (d). Paragraph 3 (b) says:
at any time and from time to time furnish to the Minister such particulars about himself in addition to any particulars already registered by him (whether by virtue of the provisions of this Order or otherwise) on such date, at such times, in such manner and at such places as the Minister may require.
What is the use of debating any liberties when such powers are given to a Minister to impose these things by public notice, and when nobody knows what a public notice is? Similar obligations are imposed on employers under paragraph 7 (d), which says:
give notice to any persons employed in the undertaking in such manner as the Minister may from time to time by notice direct of any matters that the Minister may consider necessary for the purpose of securing compliance with this Order or any requirement, direction or notice issued thereunder.
Therefore, we not only have a public notice, but a notice under a public notice

under an order under an Act of Parliament. Has anybody ever heard such an intolerable genealogy as that? When we speak of things that happen now and compare them with things that happened in the past, there are always some hon. Members opposite who are apt to remind us that we now live under a planned economy. As the Duke of Wellington would say, "If anybody believes that, they could believe anything." I could understand the position of some great dictator who had an exact plan in his mind as to how every person in the country should be directed and put into his appropriate hole, although that would be a horrible thing, a Dostoevski nightmare, to my mind. But the whole basis on which these powers rest is, as the Lord President of the Council told the House in August, that they need not be afraid of giving the Government these powers because they had not the least idea of how they were going to use them. That seems to be the most fantastic situation.
In one of the earliest Debates in this House, I recollect the Chancellor of the Exchequer, then the President of the Board of Trade, telling us, with that sincerity with which he always speaks, that he hoped this Government would do something which he frankly admitted had never been done before in human history. He said it was his sincere hope that the Government would be able to build a planned economy without direction of labour. That was a few years ago. Now we look round and what do we see? We see direction of labour without one vestige of a planned economy. We see a world of chaos, confusion, contradiction and slavery.

9.35 p.m.

Mr. Quintin Hogg: I was grateful to the hon. Members who moved and seconded this Motion that they spoke to the merits of this order as it is before this House. I propose, if the House will bear with me, to follow them in that respect. But I must say also that I was grateful to the hon. Member for Devizes (Mr. Hollis) for making it clear that, in the opinion of those of us on this side of the House, this is not simply a question of draftsmanship. It is a question of principle. I should not be reasonable or frank with the House if I did not say that everything I said the other night is still my opinion and my hope in relation


to this order, as it was to the other regulation which we were then discussing.
I wish that hon. Members opposite would glance at the order which they are now going to be asked to support in the Division Lobby, if the Minister does not agree to withdraw it, and see what it is, what it can do and what are the objections to it. We are considering—apart from the great question of principle to which my hon. Friend has justly referred—this order, and, in particular, some of the arguments against it brought, not by the Tory Party, not by the Liberal Party, not by Independents, but by a Select Committee of this House. I beg hon. Members, and the right hon. Gentleman in particular, to look at the merits of this case to see what they are really doing here. If they do that, I cannot think there will be found a single speaker who can confirm the actual terms and provisions of this order.
The first thing to which I would draw the attention of the hon. Members is the fact that the order is admittedly an order for the registration of what are called—whatever these terms may mean—"spivs, drones, eels, and butterflies." That is the position. If hon. Members opposite will look at the first page of the Minutes of Evidence given by the two civil servants who were called before the Select Committee, they will see that Sir Harold Wiles said:
It is true we might, I suppose, have put some of these classes or limitations into the order itself, but the point of that was that what the Prime Minister very loosely called 'spivs' and 'drones' are not very easily definable, and we shall have to find, by trial and error, whether we are getting the people whom the Government are after.
That is a frank admission by the civil servant that the people who register under this order will be registering themselves as spivs and drones. I say to the Members of the Government that if they think that any sane inhabitant of this country is going solemnly to register himself as a spiv or a drone, they are going to be greatly disappointed. Nobody is going to commit that foolish act against himself, except those who are intolerable asses. Nobody is going to do this thing. The only people who are going to register under this order are the very meek and law-abiding people who, by definition, the Government do not want to catch. The real people, the spivs and the drones, are not going to pay the smallest

attention to what the right hon. Gentleman says. I hope that, in addition, anybody who has the spirit of a free Englishman will take exactly the same line. So the first objection is that people are being asked and expected to do what anybody who has the true attributes of the English race will not be prepared to do.

Mr. Blackburn: I remember that on the last occasion when the hon. Member was accused of being an agent provocateur in this matter, he denied the charge. He has now repeated the words which he denied he used on the last occasion.

Mr. Hogg: If the hon. Gentleman will look in HANSARD, he will find that he is entirely wrong. It is true that I used the same expressions on each occasion, and meant them on each occasion, and I shall use them again if anybody wants to hear them, but I am not going back with the hon. Gentleman into the particular misconstruction of them to which I objected a few nights ago, because that would be neither in Order nor profitable. What I said then is correctly reported on the pages of HANSARD.
The next question we have to decide is: whom are we going to ask to register? The answer is that nobody knows—not even the Minister. Nobody in the world knows who is going to be asked to register under this order, and nobody will ever at any stage have the right to debate it in the House of Commons. All we do know—and this takes me to the next point I desire to make—is what the order says about it. What the order says about it is:
If the Minister from time to time by public notice so requires, any person of either sex who is at the date of the notice in Great Britain, or not having been in Great Britain at that date subsequently enters it, or any such person of any class or description specified in the notice shall register …
I now ask the House to consider what the Minister has power to do under this order. For the purposes of this argument, I am not in the least impressed by any assurance which the Minister may give of the use to which he intends to put this power. If the power is not required it should not be demanded. If the power is required it ought to be defined. Does anybody who has read the order deny that under the order against which we are praying, without any further Amendment and without any further Debate whatever in this


House, a Fascist Minister could order all Jews to register in this country? That is what he could do because they are persons "of a class or description."

Mr. Ungoed-Thomas: I am sure the hon. Gentleman does not mean to be unfair. Paragraph 4 makes very wide exceptions, and so far the whole Debate has been conducted as if paragraph 4 does not exist.

Mr. Hogg: Paragraph 4 does not except Jews.

Mr. Ungoed-Thomas: Mr. Ungoed-Thomas rose——

Mr. Hogg: I will not give way again. The hon. and learned Gentleman has made a bad and foolish point, and he has had his answer. He is not going to be given a chance to make another until he speaks. Let me give another example. Does anyone doubt that people with red hair, like the hon. Lady the Parliamentary Secretary to the Ministry of Food, whom I am glad to see on the Front Bench, are persons of a description? She is a person who, perhaps, is exempt for other reasons. She may be above the age limit for all I know—[HON. MEMBERS: "Withdraw."] I withdraw. She is a married woman living with her husband, so we need not inquire into the other more delicate matter. The fact remains that without any further Debate in this House, and without any amendment to this order, the Minister could order all persons with red hair to register for a particular job, by giving notice. [HON. MEMBERS: "No."] It is no good saying "No," or braying like asses. It is no good howling like monkeys, because that is what the order provides; and because hon. Members have not read it and do not want to read it, is no reason why they should prevent other people describing what it actually does. Under this order the Minister could order all Roman Catholics to register tomorrow. [HON. MEMBERS: "Rubbish."] Yes, he could: they are persons of "a class or description." He could order all Members of Parliament to register, and I sometimes wish he would, to see what hon. Members would say.
That is the power which is being given to the Minister under the order. If he does not want that power, why is he asking for it? If he needs some other and

more circumscribed power, why does he not ask for some more circumscribed power? But the truth is he is asking for power to demand by public notice that anybody—whether British or foreign, provided he is ordinarily resident in this country—that anybody who corresponds to any class or description which he chooses to specify in the notice shall register under certain pains and penalties. I sincerely hope that this ridiculous decision will be disregarded by every man in his senses. That is the first, broad objection to the draftsmanship of this order—that it gives the Minister power to order, not merely persons who are not doing essential work, but any person of any class or any description to register under the order.
The first submission I make to the House is that it is manifest that such a definition is far too wide. I quite agree that there are certain specific exceptions in Article 4, but I have deliberately chosen as my examples, examples which do not come within any of those exceptions for that very reason. To pretend, as hon. Members do, or have tried to do, that that is not what the order says, simply, perhaps, on the grounds that they do not think that this Minister is in fact going to issue public notices in those terms, is simply intellectual dishonesty—or laziness; probably both.
The next point I wish to make relates to Article 5 of the order. The article which we were discussing, article 3 of the order, provides for the types of person whom the Minister can specify, and that is, any person of any class or description. Article 5 of the order provides the method by which he specifies them; and the method by which he specifies them is by public notice or otherwise. The first point about that is, that we do not know, we have not been told, and the Minister does not know—because his civil servant admitted it—whom he intends to specify. He has not the remotest idea.
Hon. Members who interrupted the mover of this Motion, when he said that such a notice, when it came, would be undebatable, were entirely wrong. If the provision were that the Minister could by Statutory Rule and Order under the regulations specify a certain class of person to register, then we should be able to pray against that particular order in this House, as we are praying against this


order, and get a vote on it, and the House could debate it. But that is not what is provided. What is provided is that the Minister by public notice may do it, and the public notice is not susceptible to debate in this House. I challenge any hon. Members opposite to say it is. I challenge anyone to say I am wrong. The Minister could order all Jews in this country to register, and the House would be unable to debate the thing directly—unless somebody happened to get hold of some obscure order or Act of Parliament, or unless the Minister's salary happened to be under discussion at the time.

Mr. Ungoed-Thomas: Jews are included under article 4.

Mr. Hogg: Admittedly, elderly Jews over 51 could not be called to register, but young Jews——

The Parliamentary Secretary to the Ministry of Labour (Mr. Ness Edwards): Under 18.

Mr. Hogg: Jews who can show that they are above or below the age limits are exempted, but the Minister can order all Jews as such and as a class to register.

Mr. Byers: As a class.

Mr. Hogg: As a class—and nobody in this House could debate it, because it would be done by public notice and not by Statutory Rule and Order.

Mr. Ness Edwards: I think the hon. Member will agree that any Jew in employment, no matter what his age, cannot be called upon to register. He is excluded by the order.

Mr. Hogg: The hon. Member is entirely wrong. If he will point to the provision on which he relies I am willing to give way. I repeat, if the Parliamentary Secretary will point to a single provision which justifies his most inept interruption, I will give way.

Mr. Tiffany: Read article 6.

Mr. Hogg: The hon. Member tells me to read article 6.

Mr. Nigel Birch: He is always wrong.

Mr. Hogg: Article 6 says:
The provisions of Article 5"—
not article 3, but article 5—
shall not apply to a person carrying on an undertaking, or a branch or department of an undertaking, which undertaking, branch or department is engaged in essential work, and

any such branch or department shall be treated as a separate undertaking.
If the hon. Gentleman thinks that by mere inability to read he can acquire some remote kind of consolation for his conscience—which must be already direly stretched—all I can say is that the hon. Member should get a certificate from his constituents that he really can read and write. At any rate, public notice or otherwise, I shall maintain that the hon. Member is wholly illiterate unless he withdraws his interruption.

Mr. Tiffany: If the hon. Member reads article 6 he will see that it say:
The provisions of Article 5 of this order shall not apply to a person …
Obviously, "person" includes Jews, as mentioned by the hon. Member. I am merely suggesting that the whole of his argument is based upon a false assumption.

Mr. Hogg: I cannot conceive how any literate person could have made that interruption. I have read every word of Article 6, and how it can be said that Jews could not be ordered——

Mr. Tiffany: All Jews.

Mr. Hogg: Of course, they are entitled to the benefit of the age limit, the sex limit, the essential works limit, and anything else one likes. The Minister could specify Jews as such and as a class in this order, and do not let anybody make any mistake about it. There is no magic in their carrying on undertakings.

Mr. Keenan: Are Jews all that the hon. Member is worrying about?

Mr. Hogg: And Gentiles could be specified, too. This is a nonsensical order which puts us in this position, that the Minister could specify that all Gentiles——

Major Guy Lloyd: And Scotsmen.

Mr. Hogg: —and Scotsmen, or all Communists—one of whom I see sitting on the benches opposite—or all Tories, or all members of the Labour Party, or all capitalists, could be ordered by notice.

Mr. George Porter: Or people with long noses.

Mr. Hogg: Or people with long noses. Anybody could be ordered so long as they be of a class or description. Any-


body could be specified in this order, and if so specified he would have to invoke either the age limit, or the sex limit, or one of the other special exceptions in article 4. This is the order, and the House is debating tonight, whether or not it shall remain the law of this land. All I can say is that, if any hon. Member goes into the Lobby in favour of this order in its present form, he ought to be certified insane, and thereby debarred from any further registration.

Several Hon. Members: Several Hon. Members rose——

Mr. Hogg: I shall not give way again. I have given way too often already. I am now passing to something else. When I was interrupted by the hon. Member for Peter borough (Mr. Tiffany), in his rather inept intervention, I was coming to article 5, which deals with the method whereby the Minister is proposing to exercise the power given to him under article 3. I had pointed out that whatever else the words of article 5 may mean—and they are almost unintelligible, as the civil servants found out—they certainly do not include a Statutory Rule and Order, which alone is the method appropriate to a matter of this kind, and which alone is the method which would give this House an opportunity of debating what the right hon. Gentleman proposes to do.
Again, I challenge the Under-Secretary to point to anything in the order to show that I was wrong. When the civil servant was asked why he had to choose this method, this undebatable way of specifying whole classes and stigmatising them as drones, the only answer he could give was that the whole thing was so vague that they might want to change their minds, and that they did not want the inconvenience and odium of coming back to the House of Commons. They are afraid of this House of Commons, and afraid of the inconvenience their own idiotic decisions may make. No one will obey an order of this kind, because the whole thing is unworkable.
I come now to the words "public notice or otherwise." I particularly draw the attention of the House to the words "or otherwise." This is in article 5 of the order, on page 3. The words "public notice" are, as has been pointed out, both undefined and undefinable, and the courts will sooner or later have to

decide what is a public notice; but members of the public will be jeopardised and liable to imprisonment, because they may have made a mistake as to what is or is not a public notice under the terms of this order. But what do the words "or otherwise" mean? I suggest that they mean a notice which is not a public notice. I cannot attach to them any other meaning than that. I am willing to accept any other possible construction which is put forward, but I have done my best, and the only construction I can put on these words is a notice which is not a public notice.
Let us see what that implies as a matter of legal consequence. It means, having designated people with red hair in his notice, the right hon. Gentleman is under no obligation whatever to make individual people with red hair know that a notice has been issued about them. It is possible that he may make an announcement on the wireless. He may issue a notice at the employment exchanges, and at some of the post offices, but he is under no obligation to do so, because he can do "otherwise," and a very good example of that is to write a note marked. "confidential" to the Archbishop of Canterbury. As far as I can see, under the terms of this Order as drafted, the right hon. Gentleman, having told all Jews to register, can make them do so legally—that is to say, they can be punished if they do not—by writing a letter marked "confidential" to the Archbishop of Canterbury.
The fact of the matter is that persons can be rendered liable to pains of imprisonment and fine for not registering under an order which has never been properly brought to their notice. There was a time when there was some sense in the doctrine that every man is presumed to know the law; but the right hon. Gentleman has to go back to very ancient days indeed to find a precedent for what he is doing under article 5 of this order. He has to go back to the days of that ancient city, when the aristocracy, the Government Front Bench of those days, in order that the public should not know the laws, had them printed so high above their heads that no one could read them. Those were comparatively enlightened times compared with the present when orders like the present have to be seriously discussed.
But I do not mind if hon. Members walk into the Lobby like sheep behind their leaders in support of this order, because it is so unworkable and absurd that I prophesy that if it is not annulled tonight, it will be a dead letter within six months. Nobody will observe it, and the right hon. Gentleman cannot enforce it. What, after all, defeated prohibition in America, the 20 miles per hour speed limit in this country, the religious tests or the cruel punishments of the past? It was not that the people defied laws, which were silly and cruel. It was because all men of good sense simply disregarded them. The Minister will have to come to the House either to ask for more powers, powers for the right to machine gun the population, or put them into concentration camps, and the right to have secret police, or to confess that this order is totally unenforceable without the full panopoly of the powers of a totalitarian State. It is a sad commentary on the degradation to which this House has sunk in this Parliament that we should be seriously discussing tonight whether or not to annul an order which is so contrary to the principles of morality and commonsense.

10.2 p.m.

Mr. Frederick Lee: May we now hope that the House will agree to discuss this order against the background of the economic condition of the country at the present time? It is so easy to tear to pieces any kind of legislation from a purely academic point of view, and I agree with the hon. Member for Devizes (Mr. Hollis) that every Member of this House detests in any form the direction of labour. But I believe that there are many Members who prefer the direction of labour rather than that this country should go down in poverty, and our people never attain a decent standard of life. When we hear from Members opposite of their sudden desire to free the people we should remember that for two years, since the end of the war, thousands of our workmen have been under the Essential Work Order. We have never heard any protest from the benches opposite about that——

Mr. Hollis: My hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) pointed out that on two occasions we divided the House on that matter.

Hon. Members: Withdraw.

Mr. Lee: I ask the hon. Member this question: Have the Tory Party or the Federation of British Industries ever demanded the withdrawal of the Essential Work Order?

Mr. Hollis: We divided the House.

Mr. Boyd-Carpenter: Mr. Boyd-Carpenter (Kingston-upon-Thames) rose——

Col. Dower: On a point of Order. When the hon. Member for Hulme (Mr. Lee) has asked my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) a question ought he not to give way, and allow my hon. Friend to answer him?

Mr. Lee: I asked the hon. Member for Devizes if he wished to answer a qustion.

Mr. Boyd-Carpenter: I am sure that the Minister of Labour will recollect that in October, 1946, a Motion to annul the then Control of Engagement Order was moved by my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor), seconded by myself, and taken to a Division. There was also another occasion, which I think the Minister will recollect, when we did the same.

Mr. Lee: The Tory Party or the Federation of British Industries will not ask the Minister to withdraw the Essential Work Order, embracing mining, agriculture, and foundry work.

Mr. Hollis: Mr. Hollis rose——

Mr. Lee: Therefore, it is quite untrue for the Mover, or for other hon. Members opposite, to infer that we are now getting direction of labour for the first time in peacetime.

Mr. Hollis: Is it in Order for the hon. Gentleman to ask me a question and not to allow me to answer.

Mr. Deputy-Speaker (Major Milner): I understood the hon. Member to say that the hon. Member for Devizes (Mr. Hollis) did not rise to answer the question when it was put.

Mr. Byers: The hon. Gentleman has been attacking the hon. Gentleman above the Gangway, and I have no objection to that, but he then goes on to say, "Therefore, the Mover and Seconder—". May


I, for the purposes of record, point out that they were Liberals?

Mr. Lee: The hon. Member who moved the annulment of this order told us that we were now seeing the direction of labour for the first time in this country during time of peace.

Mr. Byers: I said "By order."

Mr. Lee: We have direction by the Essential Work Order, and have had it ever since the war finished. During the period of mass unemployment—I can speak personally on this issue—I could go along to the employment exchange and be handed a green card by the man behind the counter. He would tell me to go to a particular job, and if I did not go, I forfeited my right to draw benefit. Is not that direction of labour? Why is it now suggested that because of the concern of my Party and of the Government to pull the nation through this economic blizzard we are abrogating the rights of freedom, and the rights for which the trade unions fought? We have heard for a long time in this House complaints of a campaign of scarcity and austerity from hon. Members opposite. This is nothing more than an attempt to perpetuate the austerity to which they are objecting. I believe that the people of this country will recognise that if we do not obtain the correct numbers and proportion of labour in those supplying industries on which the rest of industry depends, then we can never hope to get through our.present economic difficulties. I am entitled to say that the only reason why hon. Members opposite are in fact now objecting to the direction of labour—[Interruption.] Can hon. Members tell me the time when they objected to the type of direction which I indicated—the man at the employment exchange who had to go to the job to which he was ordered?

Mr. Byers: Does the hon. Gentleman accuse the Liberal Party of taking that action?

Mr. Lee: I accuse the Liberal Party of nothing. The Liberal Party have both feet firmly planted in mid-air. [Laughter.] Hon. Members may laugh, but they have not got a policy. Neither the hon. Gentleman who moved this Motion nor his supporters in the Tory Party have given a single constructive alternative to the

order which they are now opposing. The whole reason for the existence of this order is that the increase of productivity which is now taking place in certain industries demands that there shall be a far greater number of people in essential industries which supply engineering and other industries with the raw materials which they need. They know well that if the increased productivity which we need in these industries does not continue as is the case today, there will be unemployment in those industries within a few weeks. I believe that the country as a whole, or at least the workers, are perfectly prepared for the implications of this order.
We have been told for over two years that this Government have not, in fact, governed the country; that it is the trades unions which govern the country. It is significant that the objections to this order come from the opposite side of the House and the support comes from the trade union members. So far as hon. Members opposite are concerned, all they want is to see a revival of the prewar days of starvation. I am sure that unless we can get a balanced labour force in this country, then inevitably we face a serious position. Therefore, I believe that the working class movement, for whom I can speak, realise there is no alternative in a planned economy to an order of this type. I have no apology to make for introducing the word "spivs" to this House. I only introduced the name; I leave the rest to hon. Members opposite.

Sir Harvie Watt: Would the hon. Gentleman give a definition of the word?

Mr. Shurmer: Let the hon. and learned Gentleman get out his mirror.

Mr. Lee: At one time essential work had to be defined in a Statute. I realise that what was an essential occupation at one time will, by the very success of production in another industry, eventually become important priority work. Therefore, I believe it is impossible for the Minister to submit to this House time after time that such and such an industry has now become essential. It would be contrary to our best economic interests and it would retard productivity. A basic industry, which becomes a priority, does so because of its success in


production whereby it feeds other industries, and in that way it becomes an essential work long before a Debate in this House can, in fact, be held. The majority of the people of this country understand that only by taking measures of this kind in circumstances such as we now know, can this or any other Government pull the country through its present difficulties. I believe this Debate tonight will show that the austerity campaign of hon. Members opposite is reaching a more dangerous state, in that they are trying to stop the Government taking the only measures which can be taken to pull this country through the economic crisis in a short time.

10.14 p.m.

Mr. Joynson-Hicks: The hon. Member for Hulme (Mr. Lee) who has just spoken, has indicated to the House that direction in one form or another has always been the intention of the Socialist Party. I want to call the attention of hon. Members to the contrary. I believe the order which we are debating tonight represents a milestone in the history of this country, and I am very anxious to try to get hon. Members to appreciate the very real seriousness of the trend of policy which has come over the Socialist Party in the government of this country at the present time. May I call attention to the background of this matter?
The hon. Member for North Dorset (Mr. Byers), who moved this Prayer, made some reference to the fact that direction of labour was necessary during the war. May I remind the House that it was then necessary for a particular purpose, to preserve ourselves from the armed might of other nations? We are now introducing direction of labour into this country when there is no army of another nation waiting 20-odd miles away from the shores of this country. For what purpose? Is it to preserve ourselves? Presumably, its only purpose is to preserve ourselves from ourselves.
Can hon. Members realise that the victory which we achieved has resulted in our seeking to introduce democracy among the vanquished, while we ourselves are adopting a policy which is bound to lead to just that very authoritarian regime which we are seeking to stamp out in Germany. I would also ask hon. Members to carry their minds back to the end

of the war. At the time of the General Election, the election manifesto of hon. Gentlemen opposite said nothing about direction of labour or about registration for employment at all. On the contrary, it claimed that the Socialist Party were going to enlarge the freedom of the individual. I believe that every hon. Member sitting on the Benches opposite elaborated that theme to his constituents. Some of us challenged them during the election on the point that the Socialist policy of controls could only, in its logical result, lead to direction of labour. That was denied emphatically, in my constituency, and I believe in every other constituency.
I challenge any hon. or right hon. Member opposite to tell the House that he warned the electors of his constituency that the Socialist policy would lead to direction of labour in any form at all. [HON. MEMBERS: "They cannot."] They cannot do so, because, at the time, the Socialist policy on labour problems was based upon the National Government's White Paper on full employment. To that White Paper the present Foreign Secretary contributed greatly. There was no suggestion in the policy of full employment of any sort of control or direction of labour whatsoever. The policy was based upon co-operation between employers and employed, upon sound Budgets and upon a planned economy. It was based upon all sorts of matters of that description, but in no respect was it based upon the direction or control of labour.
I would again remind hon. Members of the next stage at which the Government have arrived on the slippery slope down which they are sliding the whole of the country at the present time. That stage was reached in January of this year, in the statement upon economic considerations, Command Paper 7018. Hon. Members will probably recall that the White Paper emphasised the maldistribution of labour in this country as it then was, and that it set out its policy for overcoming the difficulties. I would remind hon. Members of what it said in paragraph 21 in order to emphasise that the problem then confronting the Government was different only in degree from the problem at the present time. It says:
How is this increase of production


which it had emphasised as being essential—
to be obtained? By ensuring that those industries which provide essential supplies are fully manned up.
That is what every hon. and right hon. Member on the other side of the House has emphasised as being necessary at the present time. Now it is proposed to do it by direction and by control of labour, but at the beginning of this year there was no such suggestion whatsoever. It was to be obtained:
… by maintaining full employment so that we can make use of all the manpower we can muster.
In paragraph 26 of that White Paper the Government again emphasised that:
The keynote of all our industrial activities during the immediate period ahead must be to steady the costs of production, to man up the essential undermanned industries and above all to step up production.
Again there is no suggestion whatsoever of direction of labour or compulsion of any sort. I would again remind the House of the next step towards this milestone which we have now reached, and that was in the "Economic Survey for 1947" which came two months later. I want hon. Members particularly to realise what was said by the Government so short a time ago in a Paper which was accepted by this House. In paragraph 131 we have the categorical statement by the Government.:
Now that direction of labour has been abandoned, there is no single measure which the Government can adopt to bring about these adjustments.
It went on to outline the multiplicity of methods which the Government would adopt in order to bring about the adjustments which it was requiring to make with regard to putting right the maldistribution of labour. After all, not a very large adjustment was necessary: it was a matter of 278,000 people out of a total employed population of 18,500,000. What has happened we do not know. The only figure we have so far been given by the Government is that out of the saving in manpower it was intended to make from the public service of 80,000 by the end of this year, the Government have saved only 32,000. That figure was announced by the Minister for Economic Affairs recently and was greeted by his supporters with considerable cheers, but I wondered at the time if hon. Gentlemen opposite realised that in the public ser-

vice which had produced a reduction of manpower of 32,000, there were included all the employees in N.A.A.F.I., the British civil employees in U.N.R.R.A. and also the Civil Defence. Therefore, in the natural course of events it is not surprising that there should have been a substantial reduction in the number of people employed in that category.
I would again remind the House of the Government's intentions as expressed earlier during this year. In the same White Paper the Government said that it:
has no direct control over the way in which manpower moves; it can seek to influence the movement in a number of ways, but the ideal distribution of manpower would involve changes of such magnitude that it would be impossible to bring them about by any means short of complete wartime direction. Even if direction were used"—
these are the words I commend to the House as the Government's opinion earlier this year—
even if direction were used, the transfer of labour would be limited by lack of accommodation.
There has been no improvement in that situation sufficient to make any change of policy on the part of the Government warranted. Because I want hon. Members opposite to realise how the policy of the Government in this respect has changed, may I also remind them of what the Prime Minister said in the foreword to that paper? He made it clear that the paper explained what had to be done to rebuild our economy, and he went on:
The Government alone cannot achieve success. Everything will depend upon the willing co-operation and determined efforts of all sections of the population.
Not one word about direction or control of labour, and yet only three months later we have that pamphlet on 6th August in which the Prime Minister took the first step for the direction of labour which has been taken in this country in peace time. The next step was taken by the Minister of Labour during the course of the Debate on the Transitional Services provision. It became quite apparent then. The right hon. Gentleman, who only a month before had made it abundantly clear that the powers he had were intended to be used for the Control of Engagement Order only, and that there was no direction of labour per se intended by the Government, said that only by the use of


those powers of direction of labour could the Government meet the situation at that time. It was the most complete change of policy on the part of any Minister that has taken place in any Government of this country within a month.
For that reason I say that we have now reached a milestone, a milestone which the Government can stop at now or which they will be forced to pass, by circumstances over which they have lost control, down this slippery slope. They have no alternative, because of the circumstances and by reason of the economic facts, but to complete the authoritarian or totalitarian direction of labour throughout this country, and I ask hon. Members to bear in mind that whatever else the Minister of Labour may be controlling or directing, he has lost control completely of the direction in which he is travelling. I do not wish to detain the House, but I do want hon. Gentlemen to realise that already the hand of the Government is being forced in this respect. I am sorry that the Parliamentary Secretary has had to leave his place for the moment, because I wish to put to him a report in the Press that he has stated that already 92 people have been directed to jobs, and of those, 19 have been directed away from their homes. I have no doubt that the Minister is aware of the figures and I shall be only too pleased if he will contradict them.
May I remind hon. Members of the occasion, nearly 20 years ago, when the Industrial Transference Board endeavoured to put into operation, on a far less compulsory basis, a change in the location of individual members of industry. It was a fiasco. Even then, when the people who were chosen for the experiment had expressed their willingness to be moved, had expressed their willingness to undertake fresh work, when the miners were moved down from the North of England to Kent, they went back in flocks and herds. Up to 49 per cent. of many of these groups who had moved down voluntarily and had expressed the willingness to be moved, went back to their own homes. Many walked all the way from Kent to Cumberland.
Since then we have had some 20 years of progress and we have had a war, but the character of this country has not changed so as to make individuals more submissive or more subdued and the spirit of independence

which is in the people of this country will still resent any question of control of direction now as they did then. The right hon. Gentleman himself has called attention to the fact that a directed person "is not much use to his job, to his fellows or to himself." I agree with the right hon. Gentleman and I would add, he is not much use to his employer. Industry does not want registration or direction and the people of this country do not want registration or direction. I tell the right hon. Gentleman that he will not get recovery in this country as a result of compulsion or direction or registration, and that such proposals as this are bound to fail and will not achieve the result he desires. I suggest that the Government should either find another solution to the problem, or else give way to those who can.

10.32 p.m.

The Minister of Labour (Mr. Isaacs): I propose first to explain to the House the authority under which we are taking this action. I will later answer many interesting points raised in the Debate. Perhaps the House will bear with me while I explain the purpose and intentions of the order. Up to now we have heard a good deal about the intentions of the order and its interpretation, but we have heard nothing as to the need of taking some steps' to fill the great number of vacancies for men and women now existing in this country, the filling of which is absolutely essential if we are to meet the nation's need at the present time. Round about half a million jobs need to be filled. We must fill them somehow or those who work and do not work will find themselves in an unfortunate position.
In August of this year we passed the Supplies and Services (Extended Purposes) Act. This Act places on the Government the duty of making all services and supplies essential to the well-being of the community balance properly. It says that when we see the supplies and services available are or are likely to become insufficient to meet the essential needs of the community, it is necessary that the use of the powers conferred by these regulations should be directed more particularly to the increase of production and redressing the balance of trade. In Section 1 (1a) it is provided that for these purposes, the Transitional Powers Act is


extended so as to be applicable for the following additional purposes that is to say:

"(a) for promoting the productivity of industry, commerce and agriculture;
(b) for fostering and directing exports and reducing imports, or imports of any classes from all or any countries and for redressing the balance of trade; and
(c) generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community."

Whether it is agreed that we are going about it in the right or wrong way, that is the purpose of this order and that is the way in which we intend to apply it.
I would now like to deal with some of the questions put to me. I am glad that the hon. Member for Oxford (Mr. Hogg) has taken his place. I was afraid that he was not coming back, and I wish to comment upon his speech. I will first deal with the points raised by the hon. Member for Chichester (Mr. Joynson-Hicks). He made reference to my hon. Friend the Parliamentary Secretary and what he is reported to have said. What my right hon. Friend actually said was that out of some 90 persons directed, only 10 were directed under this order. All the others were directed under the old order for the mines; of the 10 directed under this order not one was directed away from his home. With the passage of time a person's memory of what the newspapers have said becomes hazy, and, of course, one cannot always rely upon newspapers.
I can see nothing to which one can take exception in the manner of the speech of the hon. Member for North Dorset (Mr. Byers), who moved this Prayer, or the sincerity with which he put his point of view. I will answer many of his arguments as I go along, but there are two matters to which I would like to refer. I do not think that he really meant to say that indignity and suffering would be imposed on people merely by asking them to register. If he looks at HANSARD, I think he will feel that that is not exactly what he meant to imply. Millions of working people are registered now. All of them have an employment book and are registered. It is no indignity on them, and it ought not to be considered an indignity for others who may be called upon to register.

Mr. Byers: I think that is a legitimate point. What I really meant was, as an hon. Friend speaking later said, that this was putting an additional burden upon the people.

Mr. Isaacs: Well, do we not remember that it was the Liberal Party which first made us register? I make no complaint about that. I make no complaint because, through the registration of the unemployed, the country became aware of the terrible amount of unemployment. The hon. Member mentioned conscientious objectors. He was the only hon. Member to do so. I will state exactly what is to be done about such people. I have committed to writing many of these things because, as they will be the basis of much of the working of this order, I am anxious that they shall be stated in HANSARD so that they can be brought in evidence against us if necessary. [HON. MEMBERS: "They cannot be."] I mean brought against us in Debate in this House. I am not a lawyer, and I am not speaking of the law. It is essential for the public to know what we have in mind. Frankly, I cannot imagine a conscientious objection to work. It has never been recognised by the State before. [HON. MEMBERS: "What about forced labour?"] It is all very well to twist it that way, but we have had plenty of argument regarding what kind of forced labour exists in this country now. This may not make it palatable, but we have had to put up with it.
We do recognise conscientious objection in regard to the kind of work. I hope that no one will object to doing civilian work to help the country. In so far as there are objections to particular kinds of work on religious and moral grounds, steps will be taken to recognise them. There may be, for instance, objections by teetotallers to working in a brewery. The position of such a person is safeguarded by his right of appeal. If any specific case is brought to our notice of a person claiming conscientious objection to a particular job, we will give it consideration; but we are not prepared to recognise that anyone has a right to conscientious objection to going to work, unless that person is prepared at the same time to say that he will not eat. Everyone should do his share.

Mr. Drayson: Mr. Drayson (Skipton) rose——

Mr. Isaacs: I am anxious to make my case and tell the House exactly where we stand. I wish hon. Members would let me do that. I was going to say that the hon. Member who moved the Prayer asked, what is "essential work"? I can only say it is impossible to decide. Essential work changes from day to day and from week to week, and what may be an essential job today in the factory, may not be an essential job when that particular piece of work is done. I hope, however, that really essential jobs are the only ones to which in the long run, people are directed. There is one other thing which the hon. Member said and which I want to correct. He stated that the Permanent Secretary to my Ministry had stated, and that it had been reported in the "Manchester Guardian," that it would take two civil servants to catch one spiv. [HON. MEMBERS: "Sir Godfrey Ince."] Yes, Sir Godfrey Ince, and I must say that it would not be proper for members of my Department to speak like that. Perhaps the hon. Member would like me to tell him that Sir Godfrey Ince did not make such a statement, nor did such a statement appear in the "Manchester Guardian."

Mr. Byers: I would like, then, to withdraw without qualification the statement which I made, but that was my information.

Mr. Isaacs: On behalf of my colleague, I thank the hon. Member for that withdrawal because I am sure he would not wish a statement which was never made to be recorded as attributed by him.
The hon. and learned Member who seconded the Prayer said there could be no more onerous burden on a citizen than a demand for his personal services. I can only say, "Well I'm blowed"—to think that no greater burden could be placed on a citizen than to ask him to give his services to the State. I cannot accept that at all. Every citizen has a duty to his country and our citizens gave their services unstintingly during the war. [HON. MEMBERS: "This is peace time."] Do hon. Members opposite think that some of us did not do our share? If they are trying to lay their part in the war against that of those on my side, it might be well if we examined what some hon. Members opposite did in the war. I never had much chance of playing cricket, but I always understood

that the batsman's job was to protect his wicket against the ball coming up, and that is what I am trying to do. The hon. and learned Member also made reference to the forms of notice concerned with the order, and I hope to give, a little later, more detail about that and to give some satisfaction to the House about the working of the scheme in this direction. The hon. Member for Devizes. (Mr. Hollis) said that we should go cautiously, taking the House hand in hand with us. That I hope to do. The hon. Member for Oxford stated that only a traitor to the State would register. Well, all I can say is that for a King's Counsel to make such a statement is something which prompts me to say that I will not pay another moment's attention to any remarks in his speech.
I would like to deal with some parts of the order. First, as to the provisions and purposes. On 11th November, an announcement was made in the House of the kind of purposes we had in mind. It was that we should ask people following certain occupations, within certain age limits, to register and, for certain occupations, employers to register their people. In that connection, I should like to remind the House that paragraph 5, which has been referred to as dealing with public notice or otherwise, is applied to undertakings and does not apply to persons—only to undertakings. Many Members have spoken to me about the word "otherwise." They have told me of their worries and complaints, and I have gone to the trouble of putting down in precise words, what this order does.
The order gives me power to do two things: to require persons specified in the public notice to register and to require undertakings specified by public notice or otherwise, to register particulars of themselves and their employees. The object is to obtain a register of the persons specified and a register of persons in undertakings so that we may know whether there is a field from which labour can be drawn. These people, when they register, will be asked to come to the employment exchange, and that is where we shall see the need for the further information we require. We shall ask them what kind of work they are doing, what capacity they have.
Once they come there, then they will be treated in precisely the same fashion


as people who are affected by the Control of Engagement Order. They will be interviewed for particulars of employment. In exactly the same way, they will have the same rights of appeal and will not be directed unless in the final resort it should be necessary to direct them. It is only after the person is registered that we may take those steps. I quite believe that there will be a number of persons Who will not register, but there should be quite a number of others who will; and I believe that there are sufficient men and women of good spirit in this country who, realising that the nation needs their help, will come forward and give us their help. There are those who are engaged in occupations perhaps of no use to the community who might have to have a little pressure brought to bear on them. The country's need is paramount, and that is what we are trying to meet.

Mr. E. P. Smith: Would the right hon. Gentleman be good enough to give the House a precise definition of what he means by public notice——

Mr. Isaacs: Yes, I am coming to that.

Mr. Smith: —and by "public notice or otherwise"?

Mr. Isaacs: Yes, I have already promised that I will. If at the end of my speech there is any point I have not covered, I shall be only too glad to give the information.
It is already known who are excluded. The most important of these exceptions are the age groups outside control; married women, a married woman living with her child and so on. Public notices will specify undertakings required to register—various forms of gambling including football pools, nightclubs and amusement arcades. Paragraph 6—I am going through the order as if it were a Second Reading of a Bill—precludes the Minister from requiring an undertaking engaged on essential work to register. Public notices will be of three classes. There is, first, a notice requiring street traders to register; second, a notice requiring persons not gainfully employed to register; and the third requires certain undertakings to register particulars about themselves and their employees. I will come to further details in my own time.
As to publicity, every effort will be made to acquaint the public with the terms of the order. We propose to publish what is, I think, known as a "quiz" leaflet. One has already been published in connection with the Control of Engagement Order. It has been welcomed and I have been asked to issue it more widely to hon. Members. A similar leaflet of this kind will be published, I hope, soon after Christmas. It is quite true that in the Select Committee it was not possible to give a definite answer about the Post Office. I am not at the moment in a position to say. We must consult with the Postmaster-General. It is intended to put this notice in every post office throughout the Kingdom. It will be put in all employment offices and it will be advertised in the national and provincial Press. The B.B.C. will be asked to make an announcement. It will not be merely by casually listening to the wireless that a person will be told to register. Every opportunity will be given to see that the fullest notice is given.
We shall begin by registering younger groups and we shall go on to the older groups as time goes on. It is quite obvious that if the registrations of the younger groups can produce sufficient man and women power to fill up the jobs that are vacant and are necessary to be filled, it should not be necessary to go on registering. Therefore we shall register a group at a time. During the Debate in the House on the Control of Engagement Order there was some confusion about the the nature of the order, and as similar confusion exists in regard to the Registration for Employment Order I think it is desirable to clarify the position. I can clarify it in one particular. The Post Office has now agreed that the notices be posted. There is speed for you. Five minutes ago, it was not done—now it is.

Colonel Sir Charles MacAndrew: As Chairman of the Select Committee, I would like to put this to the Minister. When we asked a witness about notices being put in every post office in the country, the reply was that he was not sure and could not tell us.

Mr. Isaacs: I do not think I am in a position to say about that. Five minutes ago I did not know about the displaying of notices, but now the hon. and gallant Member and the House know the posi-


tion. As this report has been mentioned, I would like to say in all sincerity that I appreciate this report. We must take care to see that the order is properly prepared, and therefore I am endeavouring to follow up the request of the Committee which says it must make use of the power conferred by the House upon it and then its form and purpose must be capable of elucidation. However inadequately, I am trying to give some elucidation of its form and purpose.
The opening words of the Defence Regulations 58A are as follows:
The Minister of Labour and National Service or any National Service officer may direct any person in Great Britain to perform such services in the United Kingdom or in any British ship not being a Dominion ship as may be specified by or described in the directions, being services which that person is in the opinion of the Minister or Officer capable of performing.
It means that we have to take into consideration the capacity of that person. Obviously it would be nonsense to ask a man to serve on a merchant ship who had never been on a merchant ship before. All I can say is that this is the regulation under which we are acting and under which we are hoping to carry out this duty.
I now come to the points more specifically raised by the Select Committee. They ask why classes or descriptions of persons required to register are to be specified by public notice and are not specified in the order itself. The main answer is that it is very difficult, within the confines of an order, to be sure that the classes or descriptions of persons or undertakings to be covered are accurately or sufficiently described. [HON. MEMBERS: "Oh."] I look forward to getting the assistance of the House in this matter. It might be that the original registrations failed to cover the classes of criptions of persons it was desired to include. This can readily be done by  further public notice and registration, whereas a series of amending orders would hardly be appropriate. [HON. MEMBERS: "Why not?"] If every time an amending order had to be made, we had a delay for discussion in the House, the advantage of enrolling another class would be completely lost to us by the delay.

Sir C. MacAndrew: Is it not the fact that these orders take effect the moment they are made?

Mr. Isaacs: I admit that that is a point.

Mr. Boyd-Carpenter: A pretty good one.

Mr. Isaacs: At any rate, as I am trying to carry out an order made under an Act of Parliament passed by this House—an order which all, even those who criticise it, recognise as dealing with a very difficult problem that has to be faced—I am entitled to claim that I should be allowed to use some flexibility. I do not want to rest on the process of "trial and error." But, after all, errors are made at some time or another by everybody, and people who have never made a mistake in their lives never did a darned thing. It is much better to put the matter right by an administrative act, than to come to get an order.
The Select Committee also drew attention to the point that under paragraph 3 the requirement to register must be by public notice, whereas under paragraph 5 it may be either by public notice "or otherwise." The answer to this is that when dealing with undertakings—such as a dozen pools, or something of that sort—it might be more convenient and suitable to all concerned to give that notice to the firm or firms by communication directly. But it is clear—and I want to give the undertaking—that, if that form of direct notice is given—that form, instead of public notices all over the country—to affect a certain group of firms, it will always be done in a written communication. It will not be a question of going along and giving it by word of mouth. It always will be a form of written communication. Apart from the reasons I have just explained, people are used to this procedure, and there does not seem to be good reason for trying to devise a new procedure. We called up our young men for the Services by posting notices that certain people of certain ages were to register.
I recognise, however, that the House may feel that Parliament has no control over the subject matter of the notices, which are, in effect, part of the registration order. I am prepared to ensure that in every case a copy of the public notice will be placed in the Library. [HON.
MEMBERS: "Oh."] If hon. Members do not want it, let them say so, and I shall


not put the copies there. That is easily done.

Mr. Boyd-Carpenter: Mr. Boyd-Carpenter rose——

Mr. Isaacs: No, I shall not give way. I give this further promise—if you want it.

Earl Winterton: The right hon. Gentleman should address the Chair.

Colonel Dower: He is, and saying that Mr. Deputy-Speaker does not want the promise.

Mr. Isaacs: Mr. Deputy-Speaker, I humbly apologise, and I thank the noble Lord for his continuous and courteous instructions.
I give this further promise. If any classes of persons or of undertakings, other than those announced, are to be required to register, I will inform the House before issuing further notices. It may be said that this notice is not an Order that the House can pray against. Questions can be asked and the matter can be raised on the Adjournment. A number of questions pass, I believe, through the usual channels, through which it is possible to claim a Debate. I am asking what the hon. Member for Chichester asked—cannot we all walk hand-in-hand? We want to get more people into work and we want this House to help us in that. We look with absolute contempt on the individuals who encourage people to disregard this Order. If we are to get these men we have all got to pull together. In this instance we are relying on the men and women in the factories and in the workshops especially, not the man at the bottom only but those in the draughtsmen's room and those in the managerial department. All those engaged in industry are needed to combine their efforts to get us out of the mess in which we find ourselves.
There are two or three announcements which I wish to make which I think will help the House and those who are concerned. First, there is an announcement about street traders. The public notices will apply to persons engaged in or assisting in street trading in the larger urban areas, and the local notices will indicate which are the areas affected. If anyone in an urban area should not be certain whether he has to register or not, he should, as invited in the notice, inquire at

the local office of the Ministry to find out whether a particular place is one of the affected urban areas. These areas are as follows: In England and Wales—the administrative county of London and all county boroughs, together with those other boroughs and urban districts that have a population exceeding 20,000. In Scotland—the counties of cities, such as Aberdeen, Dundee, Edinburgh, and Glasgow, and those places known as large burghs.
Selling goods from door to door or normal delivery is not street trading. Street trading does, however, include not only the selling of articles in the street, but also singing, playing and performing for profit, shoe blacking, the taking of photographs of passers-by for sale and like occupations. I am sure many hon. Members in this House will be glad to dodge those photographers. The second' point is that it is recognised that many street traders serve a useful purpose. Indeed, some of their work is clearly essential, for example, reputable traders in recognised markets. It is not possible to exclude them from the need for registration by definition in the notice, but after registration, they will have the fullest opportunities to explain their circumstances and there will be no attempt to shift them to other work. Thirdly, street traders will be required to register at times convenient to themselves during normal office hours in the week ending 10th January.
In the second classification are persons who are not gainfully employed. In addition to the persons excluded from registration by virtue of paragraph 4 of the order, the notice will also exclude persons looking after relatives or friends who are unable to look after themselves; a person who is deaf and dumb; a person who is registered under the Disabled Persons Employment Act; a person who is a member of a religious community; a person in regular full-time daily attendance at school, college, university or similar institution; apprentices and articled clerks. It is recognised that there will be many persons other than those excluded from registration who are performing useful or essential services in an unpaid capacity. Such persons are required to register, but will be given a full opportunity of saying, "I am registering but I think I am outside the classification." Full recognition will be given to claims of that sort.
I want to make clear an answer to a Question which I gave to my hon. Friend the Member for King's Norton (Mr. Blackburn), who raised the point relating to married women. In no circumstances will married women be directed under this order or under the Control of Engagement Order. Women may be performing unpaid domestic work in the home. Where it is claimed that this or any other domestic circumstances preclude a woman from undertaking essential work she can state that when she registers at the exchange. In that case a panel of women will be appointed, and they will discuss whether the case is one where she ought or ought not to be directed. In addition, whatever the panel of women may decide, the woman has the right of appeal against direction or against being expected to take a job apart from direction.
In the case of undertakings the employees have no obligation to register. It is the employer who is required to register particulars of themselves and their employees. The undertakings concerned are: (1) Businesses carried on at premises to which persons are invited to resort for the purpose of gaming or amusement by means of pin tables, automatic machines or similar apparatus, the gaming or amusement so provided being a substantial part of the business; (2) The carrying on of competitions for which prizes are offered for the forecasting of the results of future events or of past events the results of which are not generally known. I must admit that it is more suitable for a Dublin man than a Cockney to say that prizes should be offered for forecasting the results of past events; (3) The business of a bookmaker; (4) The provision of facilities for betting by means of a totalisator or for pari-mutuel or pool betting; (5) The business of a club or similar institution if intoxicating liquor is consumed on its premises and if the period during which such premises are open to members does not normally commence before five o'clock in the afternoon or cease before one o'clock in the following morning, but excluding any such business which is carried on by an undertaking engaged in any trade or business for the use of the persons employed in the undertaking. These undertakings are required to register particulars not later than Saturday 17th January.
I have gone into this at some length, but I am anxious that people who read our debates should understand what is being dealt with. After registration, and after the employer has registered particulars, the local offices of the Ministry will consider the position of those persons who seem by their age and circumstances to be available for other employment and will arrange for them to be offered other work of an essential character provided that they are within the scope of registration as individuals under the order. It is hoped that in many cases it will be possible to make arrangements to this end in co-operation with the employers. For example consultation has already begun with the Football Pools Promotors Association who are offering every possible co-operation to see that people not suitable for other work may be found employment. I hope I have dealt with all the questions asked.

Air-Commodore Harvey: The right hon. Gentleman has not referred to the numbers of ex-Servicemen registered with the Appointments Board. There are many thousands, and can we not have some indication of how they will be dealt with under this order?

Mr. Isaacs: To be perfectly frank, that point has not entered my mind. If they are within the scope for registration we shall endeavour to place them in the jobs they seek. I will look into the matter and see that it is covered.
I apologise if I have been long and tortuous, but it is the national need that is at the bottom of our minds. The great organisations of this country representing over nine million of the workers have stated they will accept the Control of Engagements Order. Their members will agree to be subject to that order, but they say that if they are to be ordered about, other people, too, should be called upon. We do call upon these people, and we feel that in the true British sense of justice which exists amongst the mass of our people they will come along and do their bit. If they do not come, then they shall be made subject to the pains and penalties of this order.

11.10 p.m.

Major Sir David Maxwell Fyfe: The right hon. Gentleman in his last remark brought the House back to the Control of Engagement


Order which we were discussing not so long ago. The House will remember, I think, that one of the defences put forward for that order being brought into effect was its limited scope and the narrow field which it covers. One thing is perfectly clear—we have seen by the introduction of this order, proof positive that when you take the path of compulsion, of forced labour and industrial conscription, you cannot alter that path but must slide down it with ever-increasing momentum and speed. This order extends to a measureless extent the duty to register, with, beyond the duty to register, in every case the compulsory power of direction under Regulation 58A.
The right hon. Gentleman in a forty-minute speech gave an explanation of the order to the House. I hope he will believe me when I say that I do not complain about the time for an instant, but he did not deal at all with the point which has been reiterated by the Select Committee and by every speaker on this side of the House as to why he takes powers which are infinitely greater on his own confession, on the confession of his officials and of his supporters, than are necessary to attain the objectives he has put to the House.
There has been no attempt—the right hon. Gentleman has not really told us why—to give definitions in any order which can be debated by the representatives of the people concerned with their liberty. There has been no attempt to give a definition of those whom he wants to reach by this order and bring into his net of registration today. He admitted that he had chosen the words specified in the notice as words which could not be debated by the House, and he gave the reason—it is within the memory of everyone—that he thought that even a Debate of this sort, a truncated Debate on a Prayer when there is no opportunity of amendment or for consideration of any of the details of the proposal, might slow up the operations of these orders. He knew, and a moment's consideration would remind him, that the orders come into force at once and when one deducts that empty reason he has already given, the only reason which remains is that he does not want a discussion of the specification and does not want a system by which the House can learn the

methods adopted with regard to those to be affected by the order, and the reasons for it.
When last we discussed this matter the right hon. Gentleman used some phrase—I forget the exact terms—referring to my fustian or ersatz emotion about it. I do ask him to believe, not only for myself but for my hon. Friends behind me, that liberty to us is not a word, and that freedom for people in time of peace, is something which, rightly or wrongly, we hold dear and always shall hold dear, and will always come forward to defend. The right hon. Gentleman may talk about freedom, but in view of the applause that he gave to this order—which first leaves to the unfettered discretion of the Minister, not to be questioned by this House, how he is to specify the people who are to be called up, and then leaves to that unfettered discretion what particulars they are to give—I can only ask, is anything so bankrupt of forethought in matters which concern the people's lives as an order drafted in the way of saying, first, that they may be asked to give the information in the schedule, and then may be asked to give such other information as to the Minister may seem good?
The same applies to employers. The Minister has made his justification for being able to proceed by something other than a public notice. He has given no justification that I have heard for or against putting the request for information—for it applies both ways, to the employer as well as the workman—this additional and unspecified information that may be demanded. He has given no justification that I have heard for giving to his officials the right to enter, without warrant apparently, into any businesses in order that they may see—not for the past but for the future—that everything is going according to their desires. He has certainly given no explanation of this extraordinary provision in paragraph 7 (d):
give notice to any persons employed in the undertaking in such manner as the Minister may from time to time by notice direct of any matters that the Minister may consider necessary for the purpose of securing compliance with this Order or any requirement, direction or notice issued thereunder.
He takes powers to make an informer of anyone who may be employed and to whom he may give the notice.
Again I say, this is not good legislation. If it is the legislation that the right hon. Gentleman and his colleagues want, then for heaven's sake let them put it in a Bill, let them produce the Clauses so that Amendments can be moved, and let the right hon. Gentleman and those who have cheered him, have the privilege of voting in the Lobbies against Amendments to try to strike out proposals of that sort. They know that we have to accept this miserable order en bloc, or vote against it to the extent of our power. They know very well that if they put forward an industrial conscription Bill, and it were debated line by line, Clause by Clause, and Amendment by Amendment, hon. Members behind them would have to declare their votes, and afterwards face up to their votes on matters from which they would greatly shrink before the electorate.
I have listened with the greatest attention to the right hon. Gentleman and the hon. Member for Hulme (Mr. Lee), who defended this matter on general grounds. There seemed to be a ring of remembrance in these general grounds and it came to me, not with great astonishment, but some surprise, that there is no argument on the general case advanced, that Wilberforce did not have to meet when he brought forward his proposals against slavery 140 years ago. We heard exactly the same argument: "You cannot get this produce unless you are going to use the work of these slaves. It is a great pity to take people from their families, but of course if we do not do it, the world will be without the priceless products of

their labour." They are not new arguments and they are not the answer to our case.

Mr. Mitchison: Was he supported by the organised slaves?

Sir D. Maxwell Fife: The right hon. Gentleman did not harmonise this order which he has defended tonight with a document which, as he knows, the Government issued only a few months ago. I refer to the International Bill of Human Rights, which was put forward by the Government in a White Paper from the Foreign Office in June of this year for consideration by the appropriate committee of U.N.O. Paragraph 9 of that document is in two parts. The first part is, "No form of slavery shall be permitted." Part two, as we might well expect, consists of square brackets within which are the words, "A text on the subject of compulsory labour will be inserted here later." The right hon. Gentleman, I hoped, would fill up what is to go into these square brackets so that it would harmonise the attack on compulsory labour which the Government wav making a short time ago with their defence and furtherance of it tonight. That is what we are going to vote against and I hope we shall see this order annulled and this Prayer carried.

Question put,
That the Registration for Employment Order, 1947 (S.R. &amp; O., 1947, No. 2409), dated 11th November, 1947, a copy of which was presented on 11th November, be annulled.

The House divided: Ayes, 178; Noes, 223.

Division No. 39.]
AYES.
[11.20 p.m.


Agnew, Cmdr. P. G.
Clifton-Brown, Lt.-Col. G.
Fraser, Sir I. (Lonsdale)


Amory, D. Heathcoat
Cole, T. L.
Fyfe, Rt. Hon. Sir D. P. M.


Assheton, Rt. Hon. R
Conant, Maj. R J. E.
Gage, C.


Astor, Hon. M.
Cooper-Key, E. M.
Galbraith, Cmdr. T. D


Baldwin, A E.
Corbett, Lieut.-Col. U. (Ludlow)
Gammans, L. D.


Barlow, Sir J.
Crookshank, Capt. Rt. Hon. H. F. C
Gates, Maj. E. E.


Baxter, A. B.
Crosthwaite-Eyre, Col. O. E.
Glyn, Sir R.


Beamish, Maj. T. V. H.
Crowder, Capt. John E.
Gomme-Duncan, Col. A


Beechman, N. A
Cuthbert, W. N.
Grant, Lady


Bennett, Sir P.
Darling, Sir W. Y.
Gridley, Sir A.


Birch, Nigel
Davidson, Viscountess
Grimston, R. V.


Boles, Lt.-Col. D. C. (Wells)
Davies, Clement (Montgomery)
Gruffydd, Prof. W. J


Boothby, R.
De la Bère, R.
Hannon, Sir P. (Moseley)


Bossom, A. C
Digby, S. W.
Hare, Hon. J. H. (Woodbridge)


Bower, N.
Dodds-Parker, A. D.
Harvey, Air-Comdre. A V


Boyd-Carpenter, J. A.
Dower, Col. A. V. G. (Penrith)
Haughton, S. G.


Braithwaite, Lt.-Comdr. J. G.
Drayson, G. B.
Head, Brig. A. H.


Bromley-Davenport, Lt.-Col. W.
Drewe, C.
Headlam, Lieut.-Col. Rt. Hon Sir C


Buchan-Hepburn, P. G. T.
Dugdale, Maj. Sir T. (Richmond)
Henderson, John (Cathcart)


Butcher, H. W.
Eden, Rt. Hon. A.
Hogg, Hon. Q.


Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)
Elliot, Rt Hon. Walter
Hollis, M. C.


Carson, E.
Erroll, F. J.
Howard, Hon. A.


Challen, C.
Fletcher, W. (Bury)
Hudson, Rt. Hon. R. S. (Southport)


Clarke, Col. R. S
Fox, Sir G.
Hulbert, Wing-Cdr. N. J.




Hutchison, Col. J. R. (Glasgow, C)
Mellor, Sir J.
Shephard, S. (Newark)


Jarvis, Sir J.
Molson, A. H. E.
Shepherd, W. S. (Bucklow)


Jeffreys, General Sir G.
Moore, Lt.-Col Sit T
Smiles, Lt.-Col. Sir W


Jennings, R.
Morris-Jones, Sir H.
Smith, E. P. (Ashford)


Joynson-Hicks, Hon. L. W
Morrison, Maj. J. G. (Salisbury)
Smithers, Sir W.


Keeling, E. H.
Morrison, Rt. Hon. W. S. (Cirencester)
Snadden, W. M.


Kendall, W D
Mott-Radclyffe, Maj C E
Spearman, A, C. M


Kerr, Sir J Graham
Mullan, Lt. C. H.
Stanley, Rt. Hon. O.


Kingsmill, Lt.-Col. W. H
Neill, W. F. (Belfast, N.)
Stoddart-Scott, Col. M.


Lambert, Hon. G.
Neven-Spence, Sir B
Strauss, H. G. (English Universities)


Lancaster, Col. C. G.
Nicholson, G.
Studholme, H. G.


Langford-Holt, J.
Nield, B. (Chester)
Taylor. C. S. (Eastbourne)


Legge-Bourke, Maj. E. A. H
Noble, Comdr A. H. P
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Lindsay, M (Solihull)
Nutting, Anthony
Teeling, William


Linstead, H. N.
O'Neill, Rt. Hon. Sir H
Thomas, J. P. L. (Hereford)


Lipson, D. L.
Orr-Ewing, I. L.
Thorneycroft, G. E. P. (Monmouth)


Lloyd, Major Guy (Renfrew, E.)
Osborne, C.
Thornton-Kemsley, C. N


Lloyd, Selwyn (Wirral)
Peto, Brig. C. H. M
Thorp, Lt.-Col, R. A. F


Low, A. R. W.
Pickthorn, K
Touche, G. C.


Lucas, Major Sir J
Pitman, I. J.
Turton, R H.


Lucas-Tooth, Sir H.
Ponsonby, Col. C. E.
Vane, W. M. F.


Lyttelton, Rt. Hon. O.
Poole, O. B. S. (Oswestry)
Wakefield, Sir W. W


MacAndrew, Col. Sir C
Prescott, Stanley
Walker-Smith, D


Macdonald, Sir P. (I. of Wight)
Price-White, Lt.-Col. D
Ward, Hon. G. R.


Mackeson, Brig. H. R
Prior-Palmer, Brig. O
Watt, Sir G. S. Harvie


McKie, J. H. (Galloway)
Raikes, H. V.
Wheatley, Col. M J. (Dorset. E.)


Maclay, Hon. J. S.
Reid, Rt. Hon. J. S. C (Hillhead)
White, Sir D. (Fareham)


MacLeod, J.
Renton, D.
White, J. B. (Canterbury)


Macmillan, Rt. Hon. Harold (Bromley)
Roberts, H. (Handsworth)
Williams, C (Torquay)


Macpherson, K. (Dumfries)
Roberts, Major P. G. (Ecclesall)
Williams, Gerald (Tonbridge)


Maitla.d, Comdr. J. W.
Roberts, W. (Cumberland, N.)
Willoughby de Eresby, Lord


Manningham-Butler, R. E
Robertson, Sir D. (Streatham)
Winterton, Rt Hon. Earl


Marlowe, A. A. H
Ropner, Col. L.
York, C.


Marsden, Capt. A.
Ross, Sir R. D. (Londonderry)
Young, Sir A. S. L. (Partick)


Marshall, D. (Bodmin)
Sanderson, Sir F
TELLERS FOR THE AYES:


Maude, J C.
Scott, Lord W.
Mr. Byers and Mr. Hopkin Morris.




NOES.


Adams, Richard (Balham)
Dumpleton, C. W.
Hutchinson, H. L. (Rusholme)


Alexander, Rt. Hon. A. V
Dye, S.
Hynd, J. B. (Attercliffe)


Allen, Scholefield (Crewe)
Ede, Rt. Hon. J. C.
Irvine, A. J. (Liverpool, Edge Hill)


Alpass, J. H.
Edwards, John (Blackburn)
Irving, W. J. (Tottenham, N.)


Anderson, A. (Motherwell)
Edwards, N. (Caerphilly)
Isaacs, Rt. Hon. G. A.


Anderson, F. (Whitehaven)
Edwards, W. J. (Whitechapel)
Janner, B.


Attewell, H. C.
Evans, Albert (Islington, W.)
Jeger, G. (Winchester)


Awbery, S. S
Evans, E. (Lowestoft)
Jeger, Dr. S. W. (St. Pancras, S.E.)


Bacon, Miss A
Evans, John (Ogmore)
Jones, Rt. Hon. A. C. (Shipley)


Baird, J.
Evans, S. N. (Wednesbury)
Jones, D. T. (Hartlepool)


Balfour, A.
Ewart, R.
Jones, Elwyn (Plaistow)


Bechervaise, A. E.
Fairhurst, F.
Jones, P. Asterley (Hitchin)


Bellenger, Rt. Hon. F. J
Fernyhough, E.
Keenan, W.


Berry, H.
Follick, M.
Kenyon, C.


Beswick, F.
Fraser, T. (Hamilton)
King, E. M.


Bing, G. H. C.
Freeman, Peter (Newport)
Kinghorn, Sqn.-Ldr. E.


Blenkinsop, A.
Gallacher, W.
Lawson, Rt. Hon. J J.


Boardman, H.
Ganley, Mrs. C S
Lee, F. (Hulme)


Bowden, Flg.-Offr. H. W.
Gibbins, J.
Leonard, W.


Bowles, F. G. (Nuneaton)
Gibson, C. W.
Levy, B. W.


Braddock, Mrs. E. M. (L'pl, Exch'ge)

Lewis, T. (Southampton)


Braddock, T. (Mitcham)
Gilzean, A.
Lindgren, G. S.


Brook, D. (Halifax)
Gordon-Walker, P. C.
Longden, F.


Brooks, T. J. (Rothwell)
Greenwood, A. W. J. (Heywood)
Lyne, A. W.


Brown, George (Belper)
Grey, C. F.
McAdam, W.


Bruce, Maj. D. W. T.
Griffiths, Rt. Hon. J. (Llanelly)
McGovern, J.


Butler, H. W. (Hackney, S.)
Griffiths, W. D. (Moss Side)
Mack, J. D.


Castle, Mrs. B. A.
Guy, W. H.
Mackay, R. W. G. (Hull, N.W.)


Champion, A. J.
Haire, John E. (Wycombe)
McKinlay, A. S


Cobb, F. A.
Hannan, W. (Maryhill)
McLeavy, F.


Cocks, F. S.
Hardy, E. A.
MacMillan, M. K. (Western Isles)


Collins, V. J.
Harrison, J.
Macpherson, T. (Romford)


Colman, Miss G. M.
Hastings, Dr. Somerville
Mallalieu, J. P. W.


Corbet, Mrs. F. K. (Cámb'well, N W.)
Henderson, A. (Kingswinford)
Mann, Mrs. J.


Corlett, Dr. J.
Henderson, Joseph (Ardwick)
Manning, Mrs. L. (Epping)


Crawley, A.
Herbison, Miss M.
Marshall, F. (Brightside)


Crossman, R. H. S.
Hobson, C R.
Mathers, Rt. Hon. George


Daggar, G.
Holman, P.
Medland, H. M.


Davies, Edward (Burslem)
Holmes, H. E. (Hemsworth)
Middleton, Mrs. L.


Deer, G.
House, G.
Mikardo, Ian.


Delargy, H. J.
Hoy, J.
Millington, Wing-Comdr E. R.


Diamond, J.
Hubbard, T.
Mitchison, G. R


Dobbie, W.
Hudson, J. H. (Eating, W.)
Moody, A. S.


Donovan, T.
Hughes, Emrys (S. Ayr)
Morley, R.


Driberg, T. E. N.
Hughes, Hector (Aberdeen, N.)
Morgan, Dr. H. B.







Morris, Lt.-Col. H. (Sheffield, C.)
Shurmer, P.
Tomlinson, Rt Hon. G.


Morris, P. {Swansea, W.)
Silkin, Rt. Hon. L.
Turner-Samuels, M.


Nally, W.
Silverman, J. (Erdington)
Ungoed-Thomas, L.


Neat, H. (Claycross)
Simmons, C. J.
Vernon, Maj. W. F.


Nicholls, H. R. (Stratford)
Smith, C. (Colchester)
Walker, G. H.


Noel-Baker, Capt. F. E. (Brentford)
Smith, Ellis (Stoke)
Wallace, G. D. (Chislehurst)


Oldfield, W. H.
Smith, H. N. (Nottingham, S.)
Wallace, H. W. (Walthamstow, E.)


Oliver, G. H.
Smith, S. H. (Hull, S.W.)
Warbey, W. N.


Paling, Will T. (Dewsbury)
Snow, J. W.
Watkins, T. E.


Palmer, A. M. F.
Sorensen, R. W.
Watson, W. M.


Pargiter, G. A.
Soskice, Maj. Sir F.
Webb, M. (Bradford, C.)


Parker, J.
Stamford, W.
Wells, W. T. (Walsall)


Pearson, A.
Steele, T.
West, D. G.


Pea0rt, T. F.
Stewart, Michael (Fulham, E.)
Wheatley, J. T. (Edinburgh, F.)


Platts-Mills, J. F. F.
Strauss, Rt. Hon. G. R. (Lambeth)
White, C. F. (Derbyshire, W.)


Porter, G. (Leeds)
Stross, Dr. B.
White, H. (Derbyshire, N.E.)


Price, M. Philips
Summerskill, Dr. Edith
Whiteley, Rt. Hon. W.


Pritt, D. N.
Swingler, S.
Wigg, George


Pryde, D. J.
Sylvester, G. O.
Wilkes, L.


Pursey, Cmdr. H.
Symonds, A. L.
Willey, F. T. (Sunderland)


Randall, H. E.
Taylor, H. B. (Mansfield)
Williams, D. J. (Neath)


Ranger, J.
Taylor, R. J. (Morpeth)
Williams, J. L. (Kelvingrove)


Reid, T. (Swindon)
Taylor, Dr. S. (Barnet)
Williams, W. R. (Heston)


Ridealgh, Mrs. M.
Thomas, D. E. (Aberdare)
Willis, E.


Robens, A.
Thomas, I. O. (Wrekin)
Wills, Mrs. E. A.


Ross, William (Kilmarnock)
Thomas, John R. (Dover)
Wise, Major F. J.


Royle, C.
Thorneycroft, Harry (Clayton)
Woodburn, A.


Scollan, T.
Thurtle, Ernest
Woods, G. S.


Segal, Dr. S.
Tiffany, S.



Sharp, Granville
Titterington, M. F.
TELLERS FOR THE NOES:


Shawcross, C. N. (Widnes)
Tolley, L.
Mr. Popplewell and Mr. Wilkins

ADJOURNMENT

Resolved, "That this House do now adjourn."—[Mr. Simmons.]

Adjourned accordingly at Twenty-seven Minutes to Twelve o'Clock.